Wednesday, 26 May 2021
Financial Regulator Assessment Authority Bill 2021, Financial Regulator Assessment Authority (Consequential Amendments and Transitional Provisions) Bill 2021; Second Reading
Indeed, Deputy Speaker, and I would hope that, as you were not in the chair at the time, that those rules and those standards are applied to all members of this chamber equally, because I cannot think of a speech that the member for Bruce has given recently where he has not managed to use unparliamentary language and criticised people who disagree with him, not because of their arguments, not because of what they are proposing to do, but rather simply because of who they are. Is that what the left wing of this country has been reduced to? He criticised the parliamentary joint committee for its reports since this term began and a critical report into litigation funders in Australia. I will only briefly take the time to tell the chamber what that report found. That report found that litigation funders in this country are driving a class action tsunami that is ripping off customers, investors, shareholders and ordinary Australians who have no opportunity or cannot possibly comprehend what they are signing up to.
We have seen a recent class action here—those on the other side should keep this in mind—and, when they won an award from an employer who gave them money simply to go away, they kept 97 per cent of the payout. Those who they sought or pretended to represent received less than three cents in every dollar, yet their funds—the ones that would answer our questions, I might add—are having returns of 580 per cent. In the old days, that would be called usury. Yet the Labor Party, the member for Bruce, comes into this chamber and defends them over ordinary Australians. It is absolutely beyond my capacity to comprehend how the Labor Party can possibly do that. They fought tooth and nail to protect the outrageous profits that are being earnt on the back of Australians who do not have any other way of seeking justice. They continue to support a class action legal industry that puts profit before justice.
The member for Bruce, I might add, failed to mention that Maurice Blackburn, on the very day that the Victorian government said they would allow contingency fees into the Victorian legal system, which have been recommended against by the ALRC, the Australian Law Reform Council, and by every credible body known to this House—we have seen the disaster of contingency fees in the United States, where more money is spent on class actions than on R&D and creating jobs. On the very day that the Victorian government ignored all that advice, this committee that the member for Bruce apparently derides was able to discover that the then Attorney-General of Victoria, Jill Hennessy, had a meeting with Maurice Blackburn, and on that very same day Maurice Blackburn donated $100,000 to the Labor Party. But of course it had nothing to do with that meeting! They gave it to federal Labor, not to state Labor! This is the work that parliamentary committees do. This is the work that those on that side want to shut down.
The member for Fraser, a person that I hold in the highest regard, makes the point that the Economics Committee has been undertaking an inquiry into the implementation of the Hayne royal commission's recommendations. What we've found in that inquiry is that the Hayne royal commission was deficient. It was deficient in its inquiry; let this chamber be in no doubt. It brought forward two industry funds for questioning. It never questioned IFM, another donor to the Labor Party. It never questioned Industry Super associations.
We asked APRA, 'How is it that Industry Super can be using members' money, when members were never asked whether they wanted to give that money to Industry Super—it was taken from them by force of legislation and industrial agreement—to pay journalists at the ABC?' The answer from APRA was that they didn't know, because Industry Super holdings were so complex that they had no oversight. The Hayne royal commission had two industry funds come before it who admitted that they had spent tens of millions of dollars on marketing to fund managers for no clear benefit to their members, but it just let the inquiry cease, stop. What we on the Economics Committee have found is a cartel that is using the money of Australians to probably advance the political interests of that body. But we don't know that, because our regulators have refused to do it. I'm not saying 'have not wanted to' or 'have been incapable of'; they have refused to do it. And the Labor Party wants to shut that discussion down.
The member for Bruce can't count, and he's on the PJC. He says the PJC has only brought down two reports. We've already doubled that. No, Member for Bruce, starting an inquiry is not the same as finishing one. If you continue to make the mistake of ignoring quality for quantity, then that is all I need to know about those opposite. The things that we have uncovered, the abuse that has been underscored—and isn't it funny; when you give all of this to a royal commission full of lawyers, what do they come out with? Apparently the answer is more lawyers, more inquiries, more regulators. Does anyone in this chamber seriously think that a group of public servants are going to hold another group of public servants to account better than the parliamentary committees in this place? Where were the Australian Law Reform Commission when litigation funders were getting returns on equity of 580 per cent? Where were they?
Where were they when there were litigation funders based in Singapore, Holland and Ireland? As the tax commissioner described them to the Standing Committee on Tax and Revenue, it's almost like a checklist of tax evasion. Where was ASIC when all of this was happening? I'll tell you what ASIC was doing. They were cheering them on! They weren't standing up for Australians. They were standing up for themselves.
And the Labor Party wants to shut down the parliamentary oversight committees or don't like the questions we're asking? Where were they on that side? Coming in here, outraged at the fact that ordinary Australians were seeking justice because of some wrong that has been done, who find themselves getting three cents in the dollar.
Let us have a moment to reflect on financial planners and what has happened to financial planners. As I say, we have one of the best financial sectors in the world. There are very few other places where unfunded liabilities, looking forward, are less than three per cent of GDP. We, in this place, have done that. But I assure you: regulators did not achieve that. We have one of the best payment systems in the world. That was not achieved by regulators. That was achieved by ordinary Australians going out there and having a go.
The buy-now pay-later sector in this country—those opposite want to shut it down. ASIC wants to shut it down—to kill it with a thousand cuts of inquiries, until it no longer exists. Only the parliamentary oversight committees have brought them to heel on the question that they cannot legislate and they cannot argue for more laws to shut down a service that is providing so much freedom for so many Australians and makes our nation a fairer one. If it were left, I'm sure, to a group of public servants, all that they would do is tick it off.
So we're implementing this Hayne royal commission recommendation. I'm sorry that it's taken us so long. There was this little thing called the global pandemic in the middle. But, in the meantime, Australians have found themselves with some of the world's best financial services and products.
But I would direct members to the interim report of the Hayne royal commission—that was the report not written by lawyers—which made the point that Australia has 4,000 mortgage products. An ordinary Australian trying to buy their first house has to navigate the 4,000 types of products that they can get. This, in behavioural economics, is called 'sludge'. This, in the legal community, is called an opportunity. What the report recommended was actually to get rid of the asymmetric information created by the endless number of recommendations for more regulation coming out of ASIC and make it easier for consumers to understand what the differences between the products were. What about that? What about actually saying to hardworking Australians: 'We're going to give you the opportunity to choose. We're not going to give it to litigation funders, to class-action lawyers and to more public servants.' Well, of course, that entire report got shredded before it made it into the final report of the Hayne royal commission. But we're implementing that report.
The same people who made these arguments said: 'No, no, no; we need to really put a lot of regulations in place around the mortgage market. We'll misname them "the responsible lending laws"'—which, as history has shown, were just the most irresponsible piece of legislation in the financial sector to come out of this chamber. People who got their loans before the responsible lending—or irresponsible lending—laws, actually have lower rates of credit default than those who got theirs under them. We now have banks that have to ask you if you can produce your Uber receipts; we now have banks who have to ask you how often you go to the hairdresser and if you get your hair coloured—because, apparently, that's the big difference! We have a royal commissioner who thinks that computers and algorithms and machine intelligence are not as good at determining someone's household expenditure as someone's own memory and that we should have banks that go through that over and over. (Time expired)