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Turnbull pledges help over bank rip-offs

AAP logoAAP 1/09/2016 Paul Osborne, AAP Senior Political Writer

Ripped-off bank customers will be able to get compensation without having to hire expensive lawyers, Malcolm Turnbull has pledged.

The prime minister told parliament the government would not be supporting Labor's plan for a banking royal commission, which received Senate backing on Thursday, because it would not deliver any practical help.

Labor used question time to raise the stories of Newcastle single mum Michelle and Sydney couple Dwayne and Jenny, who met opposition MPs in Canberra earlier in the day to discuss how they lost thousands of dollars through poor financial advice.

"Will the prime minister explain to Michelle and the house why he continues to deny her a royal commission?" Newcastle Labor MP Sharon Claydon said.

Mr Turnbull said reviews announced by the government, including a 12-week inquiry by the small business ombudsman and a broader review by University of Melbourne's Ian Ramsay due to report in March 2017, could directly address such concerns.

"I imagine what her constituent seeks is compensation, recompense, justice, some form of compensation for the losses she incurred and the best that the Labor party can do is offer her a royal commission?" Mr Turnbull said.

"What we have in place - our ombudsman services, legal services, we have ASIC, we have a range of avenues that she can employ - but the one place where she will achieve no compensation at all is in a royal commission."

Asked about Sydney couple Dwayne and Jenny's borrowing of $500,000 against their home which was put into dodgy investments, Mr Turnbull said they would be able to get their cases heard "in the future".

Labor leader Bill Shorten said victims had tried existing avenues for redress.

"Will the prime minister now explain why those victims who have tried all the mechanisms outlined by the prime minister are wrong to demand a royal commission?"

Former Labor prime minister Bob Hawke agreed the banks were a key element in the Australian economy, but still thought a royal commission into their behaviour was a "good idea".

"Enough prima facie evidence is already out in the public of behaviour which is less than ideal and they shouldn't have anything to fear," he told reporters during a Canberra visit.

Former Liberal treasurer Peter Costello said banks had been a great source of stability for the economy - especially during the 2008-2009 global financial crisis.

"However you feel about banks and their service, just remember this: there is only one thing worse than a very profitable bank, that is an unprofitable bank," Mr Costello told reporters in Melbourne.

Labor sought to embarrass the prime minister in question time, asking whether he had specially commissioned Tony Abbott - who was photographed at a meeting with Pauline Hanson - to "negotiate" with the One Nation leader.

"No," was the blunt reply.

Coalition members homed in on Labor senator Sam Dastyari, who is facing resignation calls over a Chinese political donation and his new-found support for Australian neutrality in the debate over China's activities in the South China Sea.

Labor says the NSW senator declared the donation, admitted he had made an error and paid the amount to charity which should be the end of the matter.

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