Steven Ciobo (Moncrieff, Liberal Party) Share this | Hansard source

I am pleased to rise to speak on the Financial Sector Legislation Amendment (Restructures) Bill 2007. This bill, whilst broadly technical in its application, is important in that it goes in many respects to the core of the financial services industry in Australia. In particular, it has most resonance with the operations of life insurers and banks, et cetera.

This is an important bill because it puts in place a number of recommendations that were derived as a result of the Wallace inquiry, an initiative instigated by the former Labor government and supported by us in opposition. Our support for the instigation of the Wallace inquiry, which was the precursor to the bill before the House today, underscores this government’s responsible policy approach to supporting decisions taken by the then government because we felt it was in the best interests of the Australian people.

Whilst I welcome the shadow Assistant Treasurer’s support of this bill, I remain perplexed that the opposition tends to cherry pick the bills that it decides are in the national interest. We know that, if the opposition truly supported all the bills that are in the national interest and in the best interests of the Australian people, they would support all the government’s legislation. I can understand why from time to time the shadow Assistant Treasurer finds that there is a requirement to provide some point of differentiation.

I now turn to some aspects to which the legislation is seeking to make changes. This bill seeks to facilitate the adoption of a non-operating holding company as the ultimate holding company of a financial group in Australia. It is an important change because it demonstrates the opportunity to ensure that financial companies and operations in Australia can adopt a non-operating holding company structure to delineate between the different types of facilities that they may undertake and the different kinds of services that they might provide.

I intend to speak until the Assistant Treasurer arrives in the chamber and in that respect I need to touch upon a few more issues in the bill. This bill will also seek to ensure that a non-operating holding company that is at the very top of a financial group is able to allow the group to officially and effectively split the various services that they undertake. It will do this through the appropriate allocation of risk being facilitated between prudentially and non-prudentially regulated businesses of a financial group by organising the various activities that these groups undertake into separate business lines. This can aid basically in ensuring that consumers are benefited. It can also aid in ensuring that quarantining of risks can take place because the various business services that that particular business is undertaking is able to be delineated between the different aspects of the business.

In this respect I think Australian consumers can be safeguarded because this bill will ensure that by having at the very top of a structure a non-operating holding company it is able to quarantine and ensure that those various investors that might be investing in different aspects of the business can actually be quarantined from some of the riskier elements of the business. In this day and age when many Australians are perhaps more risk averse than they have been in the past, I am sure that the opportunity to ensure that there is not going to be a spread of risk, and the opportunity for a company to delineate between those safer investment vehicles and operations of the company and those other riskier elements and more entrepreneurial aspects of a company, would be welcome by those that are investing in the market through the various operating entities taking place in the financial services market. Whilst broadly technical, this bill is an important bill. I certainly welcome its introduction to the House and I commend it to the House.

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