Minister for Financial Services Kelly O'Dwyer. Picture: AAP
Minister for Financial Services Kelly O'Dwyer. Picture: AAP

Kelly O’Dwyer’s stunning backflip on Royal Commission

IT was the trainwreck interview that no Australian politician would want to ever repeat.

Financial Services Minister Kelly O'Dwyer was facing off against Insiders host Barrie Cassidy, where she was lampooned for deflecting a question over the Turnbull Government's decision not to agree to an investigation into Australia's banks.

She did not answer the question eight times as the interview got heated.

Ms O'Dwyer, who had once dubbed the idea of a royal commission as just a talkfest, then admitted to being appalled by the revelations that have come from the commission's hearings.

But today, Ms O'Dwyer has delivered a mea culpa and backflipped on her views about the Government's reluctance to establish the banking royal commission.

In a stunning turn of events, Ms O'Dwyer now admits the government got the timing wrong.

"With the benefit of hindsight we should have called it earlier, I am sorry we didn't, and I regret not saying this when asked earlier this week," the minister told a self-managed super fund conference in Melbourne on Friday.

"The government did get the timing wrong. What we did get right though, was embarking on an urgent and comprehensive reform program to fix the problems that we knew about."

Ms O'Dwyer said the commission had already highlighted "in the most profound way" some of the devastating personal consequences to have resulted from corporate misconduct.

Her total focus as minister was on fixing problems within the financial services sector.

"We should also recognise that the banks and other financial institutions have a duty to repair trust and to compensate those people who have been damaged by their actions," Ms O'Dwyer said.

"Their boards should act now."

Treasurer Scott Morrison and Minister for Revenue and Financial Services Kelly O'Dwyer. Picture: AAP
Treasurer Scott Morrison and Minister for Revenue and Financial Services Kelly O'Dwyer. Picture: AAP

Her new admission flies in the face of the comments she made last Sunday when she tried to defend the Government's position, and repeatedly refused to say whether the were wrong or right to delay the setting up of the royal commission.

In her original interview, O'Dwyer said: "I've answered your question."

Cassidy hit back: "No you haven't".

O'Dwyer then replied: "I have answered your question."

Cassidy pushed again, saying: "You haven't said whether you were wrong or right to delay it."

O'Dwyer stood firm, saying: "I've said we've established it. We have in fact established it."

Cassidy then asked again: "You have established it, but it took a long time coming. Were you wrong?"

O'Dwyer replied: "Well let me put it to you this way: we would not have done all those other things that we would otherwise have done to address these actions."

At the time, Ms O'Dwyer spent her time trying to talk up the Coalition's efforts to boost the penalties for misconduct and explain how they changed standards for financial advisers.

The interview did not go down well with viewers, who saw it as a complete disaster.

In assessing Ms O'Dwyer's performance, issues and crisis management expert Peter Wilkinson told Mumbrella:

"There is a basic first step in media interviews: answer the question. It's dead simple. If you answer the question, viewer trust goes up, more so if your argument makes sense to the listener, and even if he/she doesn't completely agree with you. If you don't answer the question trust goes down."

Australian Prime Minister Malcolm Turnbull also admitted he was wrong. Picture: AAP
Australian Prime Minister Malcolm Turnbull also admitted he was wrong. Picture: AAP

Labor also jumped on the comments made by her on Insiders, saying the Coalition had learnt nothing.

Jim Chalmers told ABC TV: "They've learnt absolutely nothing from all of the scandalous revelations that we've heard over the last little while at the royal commission."

Ms O'Dwyer isn't the first of the Coalition to change her views on the royal commission.

Prime Minister Malcolm Turnbull admitted making a political mistake in rejecting a royal commission into the banks for more than 18 months.

He also took responsibility for making the call.

"I understand when you're writing the political criticism, you say the government would have had less political grief if it had set up a royal commission two years ago - you're right, clearly, with the benefit of hindsight," he said at a press conference.

"Having said that, you have to ask yourself, would we be able to get all the reforms done?"

Opposition Leader Bill Shorten had previously called for a royal commission into the banks in April 2016 but the idea was shot down by Mr Turnbull, Treasurer Scott Morrison, Ms O'Dwyer and others.