Malcolm Turnbull has a political and a policy problem with misbehaviour and outright criminality in Australia’s financial system.

His political problem is that he desperately wants voters to focus on what is normally, for the electorate, a lower-order issue — trade union scandals, and Labor’s links with unions like the CFMEU. The business sector and his own party, however, persist in producing far greater scandals, usually with several more zeroes on the end of the sums involved than anything produced by the rrade union royal commission.

His policy problem is that the succession of banking scandals will, like the ongoing problem of corporate tax-dodging, further undermine voter support for any economic reform that looks like it will benefit corporations. Voters will wonder why they are being asked to support more economic reform when large corporations refuse to pay their fair share of tax and can gouge customers with impunity.

His response, so far, has been wholly inadequate. Yesterday’s admonishment of the banking sector by the Prime Minister was irrelevant. We are long past the stage where words will help with the finance sector — if the big banks haven’t yet worked out that there is a problem with their internal cultures, problems identified by the Australian Securities and Investments Commission, the Australian Prudential Regulatory Authority and the Reserve Bank itself, they never will.

It is time for action, not more words, and the appropriate action is a royal commission into the banks and their practices in relation to treatment of customers across everyday banking, financial planning, wealth management and insurance, including the structural problem of vertical integration of banks and their wealth management arms.

For a government increasingly looking indecisive and out of touch, a royal commission in this crucial area would be a positive step.