Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

It's a pleasure to rise and speak on the Financial Accountability Regime Bill 2022 and its three associated bills in cognate debate. As you well know, Madam Deputy Speaker Vamvakinou, I have a deep and abiding interest, having had a background in financial services prior to coming into this place, in stuff we are doing in the financial services sector.

Can I say at the outset that we in this country should be proud of our financial services sector, by and large. If we go back to the global financial crisis, it's fair to say that, whilst not everything was perfect, our economy and financial services sector came through it reasonably well. That being said, there were errors, missteps and things that could have been done better, which ultimately led to the banking royal commission. The member for Wide Bay, who's in the chamber, was one of those on our side who pushed for that royal commission. I think it's fair to say that the revelations from the royal commission were disappointing to all of us in this chamber. The reason I say that is that our big financial services companies—our banks, our insurance companies—have a social licence from our community to do what they do, and I expect, as I'm sure everybody else in this place does, those organisations to uphold that social licence and the responsibility that goes with that. The revelations of the financial services commission were enormously disappointing to me, as somebody who'd had a career in that industry before coming to this place. So I'm pleased to see this latest tranche of bills come to the House to further implement the recommendations from that royal commission.

As we look at these bills, it's important to reflect on what they are seeking to achieve. The coalition has already taken action to implement five of the recommendations from the royal commission. The Financial Accountability Regime will extend what is currently known as the Banking Executive Accountability Regime to all entities regulated by the Australian Prudential Regulation Authority and impose a strengthened responsibility and accountability framework within those institutions. In response to the financial services royal commission, the coalition made a further commitment to extend the executive accountability regime to those entities regulated solely by ASIC, and the coalition will progress this further commitment following the initial implementation of the regime to APRA regulated entities.

The BEAR establishes clear standards of conduct by imposing a strengthened responsibility and accountability framework for directors and the most senior executives of ADIs, and the Financial Accountability Regime in the Financial Accountability Regime Bill will extend this responsibility and accountability framework across all APRA regulated industries. In doing so, the FAR is intended to increase the transparency and accountability of our financial entities in these industries, and we would hope, as a result, improve risk culture and governance for both prudential and conduct purposes. The bill introduces these new financial accountability regimes across banking, insurance and superannuation, and it will strengthen the accountability framework for those sectors.

In addition, this set of bills introduces the Financial Services Compensation Scheme of Last Resort, which the coalition, when it was in government, brought to this House in late 2021. It was subsequently referred to a committee for further review, and that committee recommended the bill proceed. With the fluxion of time and the election, that lapsed, and the government is now reintroducing this bill into the House. The compensation scheme of last resort is designed to provide compensation to those consumers who have had a determination through AFCA that remains unpaid as a result of maybe the organisation that had to pay the compensation going broke or into administration and not having the funds available to make the payment. The scheme will limit the compensation to $150,000 per case, and this is broadly equivalent to the 85,000 pound limit of compensation available under the UK financial services compensation scheme.

I do note that, whilst the government was in opposition, they did raised the possibility of including MISs in this. I can see the minister in the chamber and thank him for the discussion that we had today, and I'm pleased to see that the government has sought not to include MISs in this legislation. Otherwise I think the cost to this would be unmanageable and unbearable. As I said, we're holding our superannuation funds and our are banks and our insurance companies to account through this legislation. I would put them on notice that I'm firmly of the view that MISs managers and promoters equally have a judiciary responsibility to their investors, and this is certainly not in any way a carte blanche for them to do some of the reprehensible things we've seen done in that space over the years.

All of these measures are designed to ensure that when consumers get the advice or the services that they are seeking it is in accordance with what the requirements are that they're seeking the assistance for and that, if it is not, they get appropriately compensated. I'm proud that that we have a body like AFCA to make those determinations and that, when we were in government, we established AFCA through the merging of a number of other complaint resolution processes into a one-stop shop for all financial services queries, complaints and concerns. I think AFCA by and large do an extraordinary job in that case.

The Financial Sector Reform Bill also implements some of the recommendations from the small-amount credit review, and those have been around for some time now—since 2016, I think. I agree with much of what the member for Canberra had to say in her contribution on the small-amount credit contracts. I would, however, want to ensure that people, in some instances where they do require credit, still have access to credit where it's needed. But I certainly concur with the position that they shouldn't be paying well over the odds for the white goods, the computers or other things they require in that process.

I'm pleased to see the measures in this bill and I hope that, through this continuous process of improving the regulation in the financial services sector, we see a sector that is better run and more focused on the needs of consumers in our society and in our community. We know, ultimately, that it is our financial services sector that provides the finance, the payment systems and the capacity for our economy to operate. It is critically important that the Australian people have confidence that our financial services sector is delivering the services and the products in a way that benefits them, that they can trust and that ensures that the services that they are paying for or seeking are properly delivered. If, through complaints mechanisms like AFCA, they're found not to be appropriately delivered for their benefit, and compensation is due as a result, they should be duly compensated.

I support the bills.

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