If a stadium collapsed, killing or injuring thousands of people, we’d rightly expect something done.  There would be an inquiry, no doubt, followed by recommendations.   And industries involved would be told, not asked, to change things that went wrong.

But when a financial company collapsed, ruining the financial lives of thousands of people, an inquiry did take place but the industry will now be ‘consulted’ about the ‘most appropriate mechanism’ to eradicate the problem.  Such is the tale of Storm Financial, which brought the global financial crisis to Australia’s shores, loading families up with debt they couldn’t repay.  Just like the American mortgage crisis.

In its wake, there are some welcome recommendations into how our financial industry works.  Chief among these is that financial planners should have a legal responsibility to put their client’s interests before their own.

That there even is a conflict of interest involving people paid to make you better off can be summed up simply: bonuses and commissions.  Yet these remain the elephants in the boardroom, subjects the Government dare not broach.

So the rest of the report looks good on the surface but fails to address systemic, underlying problems in Australia’s financial sector.  This is unfortunate.  Particularly, from a Government that rails against unbridled capitalism abroad but which has yet to make it clear that business as usual at home is no longer on.

Take, for example, Parliamentarians’ call into commissions: “that the Government consult with and support industry in developing the most appropriate mechanism by which to cease payments from product manufacturers to financial advisers.”

If a stadium had collapsed, we wouldn’t be talking about consulting concrete manufacturers.  We would be telling them to smarten up.  Yet, even with broad agreement—including key regulator ASIC—that it’s time for commissions to go, a committee couldn’t find the gumption to call for an outright ban.

So we’re in an odd spot.  A committee spent months examining a problem, taking direct aim at the runaway bonus culture that plagues banking and finance, then wimped out with a clarion call to consult.  Why spend so much time looking at a problem, saying it’s serious, only to call for it to end later rather than sooner?

Similarly odd is leaving aside banking entirely.  This, despite Commonwealth Bank increasing its sales targets in North Queensland (the area hit hardest by Storm’s collapse) by $170 million last year.  That’s an increase equivalent to Brisbane, a market with twice as many lenders.

Contrary to the bank’s contention that this was an isolated, local problem, its own audit of 600 Storm-related transactions found they all complied with bank practices.

Storm’s collapse in and of itself did not bankrupt people.  What hurt was that they’d borrowed money to buy its products.  Yet banks are conspicuous by their absence from the committee’s report, even though Commonwealth itself admitted it behaved badly.

Here, they admit to losing the plot completely.  Commissions are bad, but not bad enough to recommend banning.  And though bonuses are basically commissions by another name, they’re ignored altogether.

For the average customer, though, they are one and the same.  We expect a financial adviser to act in our financial interest, not theirs.  And we should expect that the products banks sell us—like credit cards, loans or lines of credit—are because we need them, not because the worker’s job and pay depend on loading us up with more debt.

Sadly, the banks’ role in Storm’s collapse was ignored in the report's recommendations.  This, despite insider testimony that they rushed to cash in on the stampede, and systematically encouraged local branches to sell more debt to get more people into Storm.  In North Queensland, $130 million of Commonwealth’s $170 million sales target increase was ear-marked for Storm.

The MPs and Senators who looked into this financial tragedy had an opportunity to blow the whistle on widespread problems in our financial sector.  They chose to ignore some, and recommend consultation on others.

That wouldn’t be good enough if a stadium collapsed, and isn’t good enough when families’ finances collapsed.  Australia was not immune, as Storm’s victims can attest, to the recklessness that caused the global financial crisis.  We should learn from it and fix the structural problems it revealed.

Read the FSU’s submission to the Inquiry here.