Govt commits to financial sector changes

Government response to banking royal commission:

* Taking acting or supporting action on all 76 recommendations

* Focus is on restoring trust in financial system and delivering better consumer outcomes, while maintaining the flow of credit and continuing to promote competition

* Strengthening and expanding consumer protections, including for small business and rural clients

* Raising accountability and governance standards

* Enhancing effectiveness of regulators

* Remediation for those harmed by misconduct

* Government to set up compensation scheme of last resort to ensure that consumers can have their case heard and be confident that where compensation is owed it will be paid. Scheme to be paid for by industry.

Action expected before the May federal election:

* Amend draft laws currently before parliament to make superannuation trustees liable for rule breaches.

* Treasurer to enable the Australian Financial Complaints Authority to award compensation for successful claims going back 10 years.

* Former consumer watchdog Graeme Samuel to review the Australian Prudential Regulatory Authority.