Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am very pleased to say tonight that the Greens motion calling for a royal commission into financial misconduct was passed by the Senate, this proud chamber, this evening. The Greens moved nearly a year ago to get support for a royal commission; unfortunately, that was voted down a year ago. But tonight we had the support of the Labor Party and the crossbench, and the Australian Senate has sent a very important message to the Turnbull government: that we support scrutiny of financial misconduct in this country. The Prime Minister is saying he will now give resources to the Australian Securities and Investments Commission, he will give it new powers and he will give it new funding.

This was something that the Senate economics committee recommended nearly two years ago. That same Senate economics committee also took the unprecedented step of recommending a royal commission. And that was just into the scandal that we uncovered in the Commonwealth Bank.

Since that Senate recommendation, we have had a series of scandals, right across the financial services industry, implicating all the big banks. We have sat through inquiry after inquiry, hearing from victims the heartbreaking stories of ordinary Aussie people who have been ripped off by financial planners, by the banks and by their insurance companies. None of them have been compensated, and virtually no-one has been prosecuted for these crimes. If I were to break into someone's car repeatedly or to steal from their home or break into their bank account, I would get thrown in jail. So how is it that so many people in the financial services industry over the years have got away with ripping off the savings of hardworking Australians?

I sat through the Senate Economics References Committee's inquiry into forestry managed investment schemes, which wrapped up only recently. The Greens instigated it. The final report was called Bitter harvest. As to those forestry managed investment schemes, we could have a royal commission just on the debacle and the catastrophe that was the loss of $4 billion of investors' money—$4 billion that has gone down the drain. Hundreds of thousands of Australians have been impacted. For tens of thousands of them it was their life savings. And many of them are still fighting for their homes. And the banks were up to their necks in it, financing what was essentially a Ponzi scheme. Every one is all care and no responsibility.

I want to point out tonight what Greg Medcraft has often publicly advocated. He has said: 'You cannot legislate for a change in culture in the banks.' He has been outspoken about the cultural issues in the banks—to the point of frustration. He knows, as our regulator—our watchdog—that he has a limited ability to impact the culture in these financial services companies which influences this bad behaviour. I have been part of this culture, as has Mr Medcraft, and I know what I am talking about.

This culture is the canvas on which the bad behaviour is painted. It is a culture of profit-making, a culture of risk-taking, a culture of cutting corners. It starts from the top, with the bonuses of these big financial services companies, these multi-million bonuses. They flow down through upper-level and middle-level management to the foot soldiers. These banks are set up to make money for shareholders, and it is this kind of culture that leads to this bad behaviour.

It is not every employee of a bank or a financial services company. The committee heard from very good financial planners—good Australians out there doing the right thing and providing good financial advice.

It is absolutely essential that we restore confidence in this industry, and the best way to do that is with a royal commission. The committee took the unprecedented step of recommending a royal commission because the Senate committee recognised that it was limited—it did not have the coercive or investigative powers that were necessary to get to the bottom of these scandals.

We need to have a system where whistleblowers can be protected when they come forward. I have no doubt that a royal commission will hear evidence from people who have not yet come forward.

The only scandals we have been able to address in our Senate inquiries have been brought forward by brave whistleblowers and have been raised to public consciousness by some equally brave and tenacious journalists. It is time that government did more. It is time we did more in parliament. The best way we can actually get this industry back on its feet and get compensation for the victims of financial crime is to have a well-resourced, wide-ranging royal commission into financial misconduct.