Katy Gallagher (ACT, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the following matter be referred to the Economics References Committee for inquiry and report by the last sitting day of the autumn sittings of 2018:

The regulatory framework for the protection of consumers, including small businesses, in the banking, insurance and financial services sector (including Managed Investment Schemes), with particular reference to:

(a) any failures that are evident in the:

  (i) current laws and regulatory framework, and

  (ii) enforcement of the current laws and regulatory framework, including those arising from resourcing and administration;

(b) the impact of misconduct in the sector on victims and on consumers;

(c) the impact on consumer outcomes of:

  (i) executive and non-executive remuneration,

  (ii) incentive-based commission structures, and

  (iii) fee-for-no-service or recurring fee structures;

(d) the culture and chain of responsibility in relation to misconduct within entities within the sector;

(e) the availability and adequacy of:

  (i) redress and compensation to victims of misconduct, including options for a retrospective compensation scheme of last resort, and

  (ii) legal advice and representation for consumers and victims of misconduct, including their standing in the conduct of bankruptcy and insolvency processes;

(f) the social impacts of consumer protection failures in the sector, including through increased reliance of victims on community and government services;

(g) options to support the prioritisation of consumer protection and associated practices within the sector; and

(h) any related matters.

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

I seek leave to make a short statement.

Stephen Parry (President) Share this | Link to this | Hansard source

Leave is granted for one minute.

James McGrath (Queensland, Liberal National Party, Assistant Minister to the Prime Minister) Share this | Link to this | Hansard source

The government opposes this inquiry because the government has taken and continues to take strong action to improve consumer outcomes in the financial services sector by: commissioning the Financial System Inquiry and implementing its recommendations; developing legislation to address misaligned incentive structures and to lift professional standards of financial advisers; strengthening the Australian Securities and Investments Commission with a $120 million funding package; and commissioning a review of the external dispute resolution schemes in the financial sector, to deliver a one-stop shop and a review of small business lending practices. The government notes that on 14 September 2016 the Senate referred an inquiry into the life insurance industry to the Parliamentary Joint Committee on Corporations and Financial Services for report by mid-2017.

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

I seek leave to make a short statement?

Stephen Parry (President) Share this | Link to this | Hansard source

Leave is granted for one minute.

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

Since I have been here, in four years I have been involved in nearly six inquiries into matters related to what we have before us in the motion today. That has been very useful. A lot of good people have spent a lot of time looking at the problems, misconduct and bad behaviour in the banking industry and looking at financial regulations. The conclusion that many of us have drawn after spending time in these committees is that we need to go the next step—that the Senate has done everything it can to help these people, especially the victims of financial crime—and that we need a parliamentary commission of inquiry or a royal commission into banks which could compel witnesses and have strong investigative powers. While we support this motion today, we really have to get on with looking after victims and getting some justice for them. The Senate has done everything it can, and we do need to go to the next step.

Stephen Parry (President) Share this | Link to this | Hansard source

The question is that business of the Senate notice of motion No. 1, moved by Senator Gallagher, be agreed to.