Labor's proposed scheme to compensate bank victims welcomed by ASBFEO

Late last week, Labor announced its response to the royal commission will be a compensation scheme for victims of financial institutions, paid for by contributions from the financial industry.

This new entity will be able to give compensation up to $2 million for consumers and small businesses who suffered financial and non-financial loss.

"The new entity will be able to take cases dating back to 1 January 2008. People wishing to have their case reviewed will have two years to submit the claim," the Australian Small Business and Family Enterprise Ombudsman, Kate Carnell, said.

Mr Carnell judged that other financial institutions have not addressed the affects of the royal commission on small business.

"We have seen so many small and family business operators affected by the extremely poor behaviour of the big banks and other financial institutions and the royal commission simply didn’t address this," she noted.

Mr Carnell added that the missing element of this scheme is that small businesses with loans over $5 million still have no avenue to have their cases reviewed.

"We will continue to advocate for bank victims who fall into this category and will push for justice. This will give those businesses that have never had an opportunity to have their case heard have access to justice," she said.