Barnaby Joyce (Queensland, National Party, Shadow Minister for Finance and Debt Reduction) Share this | Link to this | Hansard source

I rise to speak on the Financial Sector Legislation Amendment (Prudential Refinements and Other Measures) Bill 2010. The objective of this bill is to amend a number of acts, including the Australian Prudential Regulation Authority Act 1998, to improve Australia’s crisis management and prudential framework. The bill makes a number of small amendments to APRA’s preventative powers, APRA’s correction powers, APRA’s and the ATO’s investigation powers, APRA’s failure management powers, the Financial Claims Scheme and the financial sector levies.

The reforms were announced by the minister in January this year, and the legislation follows a public consultation period with the industry. The measures will commence 28 days after the bill receives royal assent. The legislation is supported by the opposition. The exposure draft consultation process allowed the Treasury to address small technical concerns, and the legislation is now broadly supported by stakeholders in the financial service sector. The bill amends a number of acts to improve Australia’s prudential framework by introducing a number of small measures that will improve the ability of the Australian Prudential Regulation Authority to manage Australia’s financial institutions during a crisis.

The bill contains several main areas of amendments. Firstly, the legislation will strengthen APRA’s power to prevent prudential concerns from arising. Secondly, the bill will amend the Financial Sector (Collection of Data) Act 2001 to allow more flexibility in the financial data collection and publishing regime of APRA. Thirdly, the legislation will amend the financial sector levies framework, which will improve the methodologies governing the determination of levies. Finally, the bill will amend the Financial Claims Scheme to improve the scheme’s operation and to expand APRA’s administration of the scheme. APRA will be able to determine the rate of interest that applies to protected accounts for the purposes of determining entitlements under the Financial Claims Scheme when APRA considers that the rate of interest is not certain.

The bill considered today allows APRA to deliver a more direct response to turmoil in global and Australian financial markets. It is appropriate that the intervention powers be taken out of the hands of the Rudd Labor government—but we think that might have already been done; we think it might now be the Gillard Labor government—and given to market experts at APRA. The government caused chaos—and we know what that looks like; we had a good show of it last night—in the market through its bungled bank guarantee scheme.

The coalition supports this bill. The bill improves Australia’s prudential framework by providing some measures allowing APRA to be more responsive to market fluctuations and financial services. I note that, even during the drafting of this speech, so many things have changed around here as this place has become ‘Pandemonium Palace’ but, in trying to get some normality into the operation of business here, I commend this bill to the Senate.

Joe Ludwig (Queensland, Australian Labor Party, Manager of Government Business in the Senate) Share this | Link to this | Hansard source

I thank Senator Joyce for his contribution to the second reading debate and I commend the bill to the Senate.

Question agreed to.

Bill read a second time.