Carol Brown (Tasmania, Australian Labor Party, Shadow Assistant Minister for Infrastructure and Regional Tourism) Share this | Hansard source

I rise to speak on behalf of the opposition in support of this package of bills which provide for the funding of the Australian Prudential Regulation Authority, APRA, through industry levies. I note that the bills are supported by industry stakeholders and are broadly designed to enable APRA to more fairly distribute the burden of levies across the entities it regulates. They will address current circumstances that result in larger entities paying less as a percentage of APRA's costs and smaller entities paying more. In particular, the current situation disproportionately affects customer owned banks. The levies collected from entities are used to fund activities including supporting the integrity and efficiency of markets and promoting the interests of consumers in markets.

APRA holds a critical place in our financial regulatory system. No more has this been seen than through the evidence provided to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. I remind the Senate that this is the banking royal commission that the government opposed so strongly that it voted against it 26 times. The evidence provided to the commission was overwhelming. Commissioner Hayne noted that members of the public submitted over 10,000 complaints about financial services entities by using the commission's web form. In addition, there had been many thousands of telephone calls and emails to the office of the royal commission. Only a few of these complaints could be fully examined by the commission, and so it undertook the significant task of choosing a selection of cases deemed to be reasonably illustrative of the kinds of conduct about which members of the public had complained.

The conduct identified and described by the commission included conduct by many entities that had taken place over many years, causing substantial loss to many customers but yielding substantial profits to the entities concerned. Very often the commissioner found that the conduct had broken the law or, at the very least, had fallen short of the kind of behaviour the community expects, and is entitled to expect, of financial services entities. The commission found selfishness, avarice and greed, often aided and abetted by institutionalised incentives for such behaviour. Consumers were kept in the dark about what was being done with their money, obscured by the complexity of the system and the conduct, with none of these actors looking after the interests of the consumer. These are the same consumers the government sought to disregard by opposing the banking royal commission in the first place.

Crucially, Commissioner Hayne found financial services entities that broke the law were not properly held to account. APRA is one of the critical bodies charged with holding our financial services industry to account. It must be well funded, and these bills ensure that it has an ongoing source of funding from the entities it regulates. But there is no point funding a regulator if it does not have the tools it needs to do the job. Labor was highly disappointed by the government's decision to further delay implementation of the banking royal commission's recommendations, in an announcement that has all the hallmarks of what we've come to expect in recent weeks—shoved out on a Friday afternoon after the Prime Minister has disappeared from view.

It is a failing of the Morrison government that the banking royal commission recommendations were not implemented in full before the COVID-19 crisis. The only reason they have not been implemented is the government has dragged its feet. After receiving the banking royal commission's final report, the Prime Minister and the Treasurer, Mr Josh Frydenberg, took six months to release an implementation timetable. One year after the report landed on their desks, the government has only completed six of the 76 recommendations made by Commissioner Hayne. The Australian public also have expectations that the banking royal commission recommendations will be implemented.

Labor supports a strong banking system, in the knowledge of the role the banks are playing in the current crisis to put measures in place. With almost half the workforce on JobKeeper or jobseeker, consumers need to be sure they are protected from financial misconduct. We join with consumer groups in holding the government to account until it keeps its promise to implement the recommendations, and we call for delays in implementing the royal commission recommendations to be limited to no more than six months. This will enable regulators like APRA to do their job with the legislative tools they need to protect consumers. Labor supports the bills.