Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Hansard source

in reply—I thank the member for Stirling for his contribution. I must say I was bemused by his critique of the Rudd government for what he asserts to be a lack of action on regulatory reform, this coming from a coalition member who himself was a member of the House of Representatives Standing Committee on Economics and observed—day after day, week after week, year after year—the inaction of the previous government in deregulating the Australian economy. We do recall that it was the Hawke and Keating governments that opened up the Australian economy, creating the open and competitive economy, and we are very proud of that record. In 1996 in came a coalition government, which is supposed to be the government for free enterprise, for openness, for competitiveness. One of the first acts of that incoming government in 1996 was to commission a report from the late Charlie Bell, who was then CEO of McDonald’s, and that report came down in 1997. Then followed a decade of the government being in slumber land. Finally, it succumbed to pressure from business organisations such as the Business Council of Australia and decided to commission a second report—this one from a group chaired by Gary Banks, the Chairman of the Productivity Commission. If you held up those two reports you would find almost identical recommendations in numerous places, and the reason those recommendations were identical was that there had been a decade of squandered opportunity.

The previous government said it was the party of free enterprise and said it supported the open, competitive economy fashioned by the Labor government before it, but it did nothing; it squandered the opportunity. Now we have the incredible sight of a coalition member coming into the chamber and saying, after about 120 days of the new government: ‘What’s the Rudd government doing about business regulation?’ The indictment of the Business Council of Australia was delivered in a report last year when it talked about the ‘creeping re-regulation’ of Australian business over the previous decade. Katie Lahey, the Chair of the Business Council of Australia, was compelled to observe late last year: ‘So much for the 10 regulatory hot spots that the previous government agreed to pursue with the states.’ She said they must have been ‘so hot they burnt a hole through the paper, fell to the floor and have not been found since’. When we came into government we had a look at those regulatory hot spots, and Katie Lahey was right—inaction and squandered opportunity everywhere. Just this week the BCA brought down another report saying that there has been review after review, report after report, and it was now looking for progress on regulatory reform. It will be a Rudd government, a Labor government—as a Labor government did before, between 1983 and 1996—that reforms business regulation in this country, reduces compliance costs and lifts productivity as the basis and platform for future prosperity.

This particular bill, the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008, introduces measures to improve the accountability, transparency and consistency of APRA’s decision-making processes and removes unnecessary complexity from the prudential regulation. Schedule 1 of the bill amends the prudential acts to introduce a court based process for disqualifying an individual from a responsible position in an entity regulated by APRA. The new regime is broadly consistent with the court disqualification regime under the Corporations Act 2001. This measure will ensure that there is a more consistent and flexible court based disqualification regime across the prudential acts. Schedule 2 of the bill introduces harmonised general directions powers which will replace APRA-specific powers for issuing directions concerning entity level activities under the Banking Act 1959, the Insurance Act 1973 and the Life Insurance Act 1995. This measure will reduce complexity and provide greater certainty as to the scope of APRA’s directions powers. It will also clarify the reviewability of APRA directions while ensuring that APRA is able to act decisively where financial interests or the stability of the financial system are at risk.

Schedule 3 of the bill removes from the prudential acts the requirement for the Treasurer’s prior agreement for administrative decisions made by APRA or the Taxation Office in relation to self-managed superannuation funds that do not involve broader policy considerations. These include decisions in relation to licensing and authorisation, exemptions from provisions in the prudential acts, compliance with minimum standards and certain directions. The removal of the Treasurer’s agreement for operational decisions will result in greater operational independence for the regulators as well as improving the timeliness and effectiveness of the supervisory process. Schedule 4 of the bill expands the availability of merits review by the Administrative Appeals Tribunal for appropriate administrative decisions made by APRA or the ATO consistent with the guidelines regarding meritory review developed by the Administrative Review Council or ARC. This measure will improve the consistency, transparency and accountability of decision making by APRA and the ATO.

In conclusion, the measures in this bill respond to recommendations of the HIH Royal Commission, the IMF 2006 financial systems stability assessment of Australia and the Task Force on Reducing Regulatory Burdens on Business, to which I referred earlier in my remarks—the task force which was chaired by Gary Banks. It produced, I think, 172 recommendations: the previous government said it had agreed to almost all of them. If you have a look at the so-called agreements, about one-third of those were in fact an agreement to conduct a further review.

We have been struck by the lack of activity on the part of the previous government. Businesses in Australia are being strangled by red tape. This piece of legislation is one modest effort to overcome that regulatory burden and reduce it while at the same time ensuring that there are adequate prudential arrangements in place. The measures are strongly supported by industry stakeholders, APRA and the ARC. This bill demonstrates the government’s commitment to reducing regulation for the financial services sector. I commend the bill to the house.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.

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