Tuesday, 12 February 2019
Matters of Public Importance
Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry
The banking royal commission has exposed a lot of very poor and bad behaviour. There is no argument about that. But I just want to correct the record: I can't remember any previous 26 votes in this House blocking a royal commission. Do you know why, Mr Deputy Speaker Mitchell? Because only executive government can create a royal commission. Those we should be thanking are senator for Queensland Barry O'Sullivan; senator for New South Wales Wacka Williams; the member for Wide Bay, Llew O'Brien; and the member for Dawson, George Christensen, who actually put together a bill to put before the House for a commission of inquiry, which is a legal possibility through the House of Representatives. The former Prime Minister, the current Prime Minister, and the former Minister for Revenue and Financial Services have all admitted that they wished they had done something sooner. We have been arguing for this for a very long time, but, as the member for Fadden outlined, we had already taken substantial action. We created the Banking Executive Accountability Regime. We have got the Australian Financial Complaints Authority, and a whole host of other manoeuvres that the member for Fadden just outlined—on credit cards, on superannuation, on so many areas of financial services that need correction and betterment.
The banking system seemed to be working fine for banks, but in so many instances it certainly wasn't working well for customers. Friends, family friends, and professional acquaintances who I've personally spent a lot of time with in my life have come out at the bad end of advice from financial institutions, including banks—whether it was Swiss loans, as outlined by the member for Fadden; or having their farm or asset sold off once there was any hint of risk, only to have the farm or the asset sold in a fire sale, with the people involved in that advice being ultimately the purchasers of it.
We have done so much already. What about the other side? They're not immune. Previous governments have glossed over financial mismanagement and bad behaviour. Where was the other side when Opes Prime happened, or the Storm Financial crisis? They let that scourge through. Where was the member for Maribyrnong then? Where was the member for Lilley? They were in similar situations and they did nothing. But we received the recommendations from Commissioner Hayne, and the Treasurer put out the government response within a weekend. We are still waiting for a response from the opposition. They say in-principle support, but that is a very vague term. We want to know the specifics of what they are going to do.
First of all, we are improving consumer outcomes. We're putting in place a best interests duty. We're banning trailing commissions and volume based bonuses. The Treasurer already said that in his speech. We are going to review, after three years, the implications of getting rid of trailing commissions, because what we don't want to do is get rid of the broking industry and have everyone relying solely on the banks for advice about loans. As I mentioned, the Banking Executive Accountability Regime is being extended to the insurance industry and superannuation. ASIC should have joint responsibility with APRA in this space, and they will have the main regulatory oversight. There will be a separate board to oversight APRA and ASIC to ensure they're actually doing their job. Trustees and directors of superannuation funds will be subject to civil penalties for breaches of their duties. There is a new system for disciplining financial advisers, with stronger industry reference-checking and greater reporting, and serious compliance concerns will go to ASIC. There's a new disciplinary body with which all advisers must be registered. We have given extra funds, $170 million, to ASIC and APRA, and we have appointed new commissioners and deputy commissioners. ASIC— (Time expired)