Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Hansard source

Senator Ferguson is interjecting very arrogantly. He remembers very well the promise the Liberal government gave at the last election that interest rates would not go up. What have we had? We have had two interest rate movements since the election. The average Australian family with an average mortgage of some $226,000 will be paying an extra $73 a month as a consequence of yet another broken promise by the Liberal government at the last election that interest rates would not go up. As I said, my colleagues will touch on some other aspects of this.

I want to come to the issue of the Westpoint financial scandal. I have asked in the Senate about other aspects of this matter. The scandal involves thousands of Australian retirees or people near retirement who have lost up to $400 million of their superannuation retirement savings in a financial scam known as Westpoint and its related entities—it was constructed of a number of what are called mezzanine property companies.

The issue I asked particularly about today relates to the revelations on the ABC Four Corners program last night. On that program—and congratulations to them for their investigative journalism—we learnt in much greater detail about two new aspects of what is one of the largest superannuation financial scandals this country has seen in the last 10 to 20 years, as far as I can recall. At the heart of this are the thousands of Australians who have struggled to save for their retirement through superannuation who have been blatantly defrauded by this Westpoint entity and the activities around it.

There are numerous aspects relating to the actions and activities of Westpoint that this government should give answers to, but I want to focus on the issue that was raised on Four Corners last night. One of the operators involved in this financial scam, Mr Richard Beck, earned some $9.2 million in commissions by enticing elderly Australians into the Westpoint investment entities. On top of that we further learned that the receiver of the Westpoint entities, Mr Mark Korda, has identified a number of financial planners, who were also involved in recommending the Westpoint entities for Australians’ superannuation retirement savings, who have collected more than $50 million in commissions from those investment vehicles.

This goes to the heart of one of the problems with at least some aspects of our superannuation industry in Australia, and that is the issue of commission based selling. We have heard evidence from Mr Lucy and ASIC—I have asked Mr Lucy and ASIC what was going on with respect to Westpoint at at least two previous hearings. What was going on was that commissions of up to 12 per cent of the moneys paid into the Westpoint entities were being charged by planners. There is an obvious conflict of interest when there are enormous commissions by any industry standard being received by the planners involved, in this case, Mr Beck. They are certainly the largest commissions— (Time expired)