Andrew Bragg (NSW, Liberal Party) Share this | Link to this | Hansard source

I believe this country has a significant problem when it comes to corporate crime, and I believe that the regulators are doing a very poor job of prosecuting people who are breaking our laws and the government is becoming increasingly complicit in this protection racket that is damaging our economy and damaging the capacity of people to seek redress when wrongs are committed against them.

There are a series of things I'd like to walk through in the time I have. First, in the recent budget the government decided they would cut the funding available to the Financial Regulator Assessment Authority. They decided they would take money from the FRAA and reduce its capacity to do reviews every two years; it can now only do reviews every five years. The point of the Financial Regulator Assessment Authority is it is supposed to ensure the regulators are doing their job, which is to enforce the law. We have a major problem in this country where regulators have not been enforcing the law, so cutting funding to that agency is, at best, a peculiar priority.

The second issue is the PwC matter. On the weekend we saw the Treasurer and some other ministers announce 'the biggest crackdown on tax advisor misconduct in Australian history' and that the government would increase maximum penalties for advisers and firms from $7.8 million to over $80 million. That's all well and good, but a very fine law is no law at all unless it is enforced. I think the question on PwC and all these corporate crimes is not one of having laws but one of enforcement. I believe these statements made on the weekend are not going to be effective because I don't believe the government is serious about improving law enforcement.

I make that statement with a lot of confidence because the ASIC inquiry, which we've been running since October, has uncovered a slew of misconduct issues inside ASIC but also in relation to cases where an enormous amount of work has been done by the regulator but no action has been taken in terms of securing civil and criminal penalties. I can name a bunch of cases, whether it's Nuix or ALS or super fund executives engaging in insider trading, where the evidence is very clear that the law has been broken but people are not being put into jail and significant penalties are not being applied. The government's priority here has been to cover up our capacity to investigate ASIC, through the use of public interest immunity claims which have been made in tandem by the Treasurer, suggested by Minister Jones. Last week here in the Senate, Minister Gallagher made it clear that the government's policy was to support ASIC's position to cover up their case files, to obfuscate and obstruct the Senate, and, therefore, give us no pathway for improving corporate law enforcement in this country. Of course a regulator under siege wants to do everything in the dark, but our job is to push things into the sunlight because sunlight has shown itself to be the best form of disinfectant.

That takes me to my last point, about APRA. The FRAA found in its review of APRA that APRA had not done enough work and was underdeveloped when it came to its supervision of the superannuation industry, and needed to do more work on the conversion of liquid assets to cash and unlisted asset valuation practices. At estimates in February I asked APRA about their efforts to ensure that superannuation members are getting accurate valuations, particularly as this is an emerging equity issue between older and younger Australians. APRA took the question on notice and have responded only recently to say they undertook a survey of 31 different funds, and 26 of those funds were doing quarterly valuations; therefore, only five are doing annual valuations. Given the market ructions we have in Australia on a regular basis, an annual valuation isn't good enough. In essence, corporate crime in Australia largely goes unpunished and the government is helping cover it up.