Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I am seeking the call to move my amendments, but, before I do that, I'll say: I am not sure who wrote that rubbish for you, Senator Watt, but I have rarely heard such an insipid excuse for such a major backflip, and I've been in the Tasmanian and Australian parliaments, for my sins, for over 20 years. I mean, what an absolute load of rubbish. As if putting an accountability regime in place is actually going to stop people applying to be CEOs and senior executives of banks where they can make multimillion-dollar salaries and the only reason that they would have those fines applied would be if they failed to meet their accountability obligations. If that is enough to turn someone off applying for such a job, they have no right to be in that job. They have no right to be in that job and earn their multimillion-dollar bonuses.

This is where we peel the lid back on this parliament and reveal the Australian Labor Party for what it is: a party of the corporates, a party of the oligarchs, in this country. That is what we're dealing with here. To hear Senator Watt get up and mount such a pathetic, insipid defence of the Labor Party's position absolutely beggars belief. Let's go back and have a listen to what Mr Jones said on 9 November 2021. He said, 'If this is going to have any teeth, there has got to be penalties'. But, of course, we have a bill that doesn't have those penalties in it, and, therefore, on Minister Jones' own argument, doesn't have any teeth. Ultimately, this country needs to end the institutionalised bribery of political donations. The banks have got themselves an absolute corker of a deal here. There were $400,000 in donations from the major banks to the Labor Party in the lead-up to the last election—$400,000 to avoid million-dollar fines. As I said in my speech in the second reading debate, the bank executives didn't even have to invest their own money in those donations. They were able to invest their shareholders' money in those donations.

There are a whole range of what I think are really valid questions to the government here, and I think it would really help Australians to understand what has happened if the government was able to step us through its contact with the Australian Banking Association—including, I might add, what conversations were had between its head, the former Labor Premier of Queensland Ms Anna Bligh, and the Prime Minister, or the Prime Minister's office, or the Treasurer or the Treasurer's office. I have no doubt that Ms Bligh, who well knows her way around the top echelons of a government, didn't muck around with Minister Jones's office when it came time to issue the Labor Party its riding instructions. I have no doubt that Ms Bligh went straight to either the Treasurer, or the Prime Minister or both—or, at the very least, to the office of the Treasurer, the office of the Prime Minister or both. That's because this was as spectacular a backflip as you would ever want to see from Minister Jones, from shaking hands with me in his office and saying that he accepted the agreement that we had made—that in return for the Greens facilitating the passage of the legislation last year he would accept our amendment to provide for million-dollar fines for dodgy bankers. He went from that to, 'Oh, no, we never made a deal,' in less than 24 hours—less than 24 hours, colleagues! That's what happened.

I heard Senator Smith's observations, and it is correct to say that the Greens were never in balance of power on the substance of this bill. We have supported this bill today because it does give effect to a lot of the recommendations of the banking royal commission. The agreement with Minister Jones was about facilitating the passage of the bill last year when, in fact, the Liberal Party were not prepared to facilitate the passage of the bill. So we were in the balance of power on an hours management issue rather than the substance of the bill itself. I do want to place that on the record because I think the observation that Senator Smith made was a fair one, and I wanted to make sure that the facts and the truth of this matter are clearly on the table as we debate this.

So we find ourselves here. The Financial Accountability Regime Bill will pass at some stage this week, I have no doubt. It has some measures that are results of the recommendations of the banking royal commission and it's on that basis that the Greens will be supporting the legislation. But what it doesn't have is what it really should have had, and that is teeth: as Minister Jones said in opposition, 'teeth'. I will remind colleagues that this is the second time today I've got up and placed on the record something that Minister Jones said when he was in opposition which he and the government have completely walked away from now they're in government. That's why politics has got such a bad reputation amongst Australians, because, honestly, they believe—and with some justification—that a lot of us in this place couldn't lie straight in bed at night. A lot of the time, the commitments we make in the lead-up to elections aren't worth the paper they're printed on or the breath with which they're spoken.

I urge the Labor Party to support our amendment, even though they've been very clear that they're not going to do that. And, secondly, I urge the Labor Party to come up with some better excuses for its backflip because, quite frankly, they were pitiful, pathetic excuses that Minister Watt placed on the record when he was summing up on the second reading.

I seek leave to move amendments (1) to (13) to the Financial Accountability Regime Bill 2023 on sheet 1913 together.

Leave granted.

I move amendments (1) to (13) to the Financial Accountability Regime Bill 2023 on sheet 1913 together:

(1) Clause 4, page 4 (line 7), omit "or by the Regulator through disqualification", substitute "by the Regulator through disqualification, or through civil penalties for non-compliance".

(2) Clause 14, page 18 (line 12), omit "or disqualification by the Regulator", substitute ", disqualification by the Regulator, or civil penalties for non-compliance".

(3) Clause 18, page 22 (after line 6), at the end of subclause (1), add:

Note: Failure to comply with an obligation under this Chapter is a contravention of a civil penalty provision (see section 80).

(4) Clause 35, page 42 (line 7), after "disqualified", insert "or liable to a civil penalty".

(5) Clause 40, page 49 (after line 17), after paragraph (4)(e), insert:

(ea) details of any civil penalty order made against the person for a contravention of a civil penalty provision of this Act; and

(6) Clause 80, page 85 (after line 12), at the end of the clause, add:

(3) A person contravenes this subsection if:

(a) the person is an accountable person of:

(i) an accountable entity that is a medium or large banking entity; or

(ii) an accountable entity that is not an ADI or an authorised NOHC of an ADI; and

(b) the person is subject to an obligation under Chapter 2 in relation to the entity; and

(c) the person fails to comply with the obligation.

Note: It is generally not necessary to prove a person's state of mind in proceedings for a contravention of a civil penalty provision (see section 94 of the Regulatory Powers Act, which applies because of section 82 of this Act).

(4) A person is liable to a civil penalty if the person contravenes subsection (3).

(5) In this section:

medium or large banking entity means:

(a) an ADI that is, immediately before the day that is 6 months after this Act commences, a medium ADI or large ADI under the Banking Act 1959; or

(b) an authorised NOHC of such an ADI.

(7) Clause 83, page 88 (line 9), omit "Note 1", substitute "Note".

(8) Clause 83, page 88 (lines 11 and 12), omit note 2 to subclause (3).

(9) Heading to clause 97, page 102 (line 24), at the end of the heading, add "and accountable persons".

(10) Clause 97, page 102 (after line 32), after subclause (1), insert:

(1A) An accountable entity, or a significant related entity of an accountable entity, must not (whether by agreement or by making a payment, and whether directly or through an interposed entity):

(a) indemnify a person who is or was an accountable person of:

(i) the accountable entity; or

(ii) a significant related entity of the accountable entity;

against the consequences of breaching an obligation under this Act; or

(b) pay, or agree to pay, a premium for a contract insuring such a person against the consequences of breaching an obligation under this Act.

(11) Clause 97, page 103 (line 1), omit "Subsection (1) does not", substitute "Subsections (1) and (1A) do not".

(12) Clause 97, page 103 (line 4), at the end of subclause (3), add "or (1A)".

(13) Clause 97, page 103 (lines 6 to 9), omit paragraph (4)(a), substitute:

(a) subsections (1) and (1A) apply to a related body corporate (other than a significant related entity) of an accountable entity in the same way as they apply to a significant related entity of the accountable entity; and

In the brief time that is left for me, I again want to be very clear about this. When the minister backflipped on the agreement that he had made and shaken hands with me on, he said he hadn't appreciated the unintended consequences that fines might have for small banks. We actually heard that concern, and in fact I wrote a letter to the minister on behalf of the Australian Greens saying that actually we would be happy with a carve-out for the small banks and the small companies, because we were not after them. We were after the big banks, because they're the ones where the CEOs get the multimillion-dollar pay packets and the multimillion-dollar bonuses on top of that, and they're the ones who've got the wherewithal, the experience and the capacity within their organisations to put in place measures that ensure that their accountability obligations are met.

But this bill has not come back with million-dollar fines for dodgy bankers with a carve-out for the little folks, the small banks. This bill has come back without civil penalties for dodgy bank executives who allow their customers to be ripped off, and that is truly a massive missed opportunity for this Senate and for the parliament. We will not give up on applying these fines, and I want to be very clear with all of my colleagues in the Senate that the Senate has not heard the last of million-dollar fines for dodgy bankers.

Dean Smith (WA, Liberal Party, Shadow Assistant Minister for Competition, Charities and Treasury) Share this | Link to this | Hansard source

The opposition will not be supporting the amendments on sheet 1913. These amendments go beyond the scope of the recommendations of the royal commission that the coalition committed to implementing. Extending penalties as set out in these amendments has not been the subject of a public consultation process, and it is not clear that it will provide any additional disincentive on top of the already significant penalties for financial institutions set out in the bill currently.

Katy Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | Link to this | Hansard source

The government won't be supporting these amendments, for the reasons outlined by my colleague earlier, in the closing speech in the second reading debate.

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The question before the chamber is that the amendments moved by Senator McKim be agreed to. It appears that a division will be required on resumption tomorrow. As the bill cannot proceed until votes can be taken, I shall report to the Senate.

Progress reported.

Ordered that the committee have leave to sit again on the next day of sitting.