Malcolm Turnbull losing in upside down banking debate

So instead of a double dissolution election officially being called to install a "tough cop on the beat" to fight rorts and corruption in the construction industry, for example, the more feverish public debate is suddenly more about Labor's call for a royal commission into the banking industry.

Thus the annointed villains in the Coalition's political drama – thuggish union officials in the CFMEU – have been abruptly replaced in the public mind by the image of banking executives interested in just making profits at the expense of ordinary customers.

Upside down politics leads to sideways policies. No wonder Bill Shorten looks more confident by the day. He understands that most voters wouldn't actually know what the Australian Building and Construction Commission is supposed to do. Nor have the damning findings of the trade union royal commission about the impacts of this on construction costs penetrated into general consciousness.

That's not so surprising when, after months of ignoring the issue, Turnbull has only just begun to campaign on it. So the destructive delays and inefficiencies on building sites appear to have little relevance to most people's lives while every Australian is always happy to share stories of banks making too much money off them.

Royal commission

Just what a royal commission into banking is supposed to achieve – let alone how - is far less clear, of course. The eventual cost and timing would also be more like the royal commission into child abuse ($500 million and counting) than the royal commission into trade unions (under $50 million). The "victims" are likely to be just as numerous, just as passionate, just as dispersed - but with many of their circumstances more disputed.

Yet a royal commission is suddenly sold as a politically painless promise to miraculously pull those banks back into line so there are no more repeats of scandals and individual tales of woe recycled.

The furore at The Australian Financial Review's Banking and Wealth Summit last week over who should responsible for establishing and policing better culture in banks – the boards, the management or the regulators – shows how potent this issue is. Add in a remuneration system that still rewards executives – very well - for aggressively successful expansion and profits. It's easy to stir community resentment.

Malcolm Turnbull, aware of the politics, decided to lecture the banks on the need for good behaviour and respect for the social contract when he addressed a Westpac celebratory lunch.

Backfired

As a political tactic, this immediately backfired. His warnings only made it easier for Labor to up the ante by promising a royal commission and by arguing even the Prime Minister conceded the system wasn't working for consumers.

Greg Medcraft from the Australian Securities and Investments Commission can only quietly laugh. He likes to cite statistics about ASIC's investigations, prosecutions and fines in the financial services industry while also talking up the need for improved culture.

It's still only now – after the opposition was getting traction - that the government is sounding ready to reappoint rather than terminate him, simultaneously promoting the extent of ASIC's powers and a willingness to provide it more resources.

Not exactly a steady course in policy or politics.