Alannah Mactiernan (Perth, Australian Labor Party) Share this | Hansard source

I do not think anyone should be surprised that we see the Liberal government trying to unwind these important consumer protections in the finance area, because the Liberal Party has extraordinary form in betraying small investors while protecting their mates. And West Australians, of all people, are acutely aware of that, having been on the receiving end of unscrupulous conduct from finance scammers and having witnessed the blatant refusal of Liberal governments—both state and federal—to take action. And now we see that the Liberal government is trying to undo the good work that was done by a Labor government.

I want to take you back to something that is still very present in the minds of Western Australians—the finance brokers' scandal of the late 1990s. I first alerted the WA parliament to this systematic abuse of the pooled mortgage schemes in Western Australia in, I think, around 1999. Week after week for two years we were explaining and exposing in parliament and through the media the profound consequences that were occurring from the failure of the then-Court government to regulate what was going on with a range of finance professionals engaged in what can only be described as a great fraud. It was a fraud that saw many, many thousands of Western Australians—self-funded retirees, families—lose almost their entire life savings. And day after day we would get the same response that we have got here—that people need the freedom, that it is 'buyer beware', that we do not need to do anything about that. The finance broking industry in Western Australia had very powerful friends in the Court government, and they simply refused to act.

What we finally saw with the state election in 2001 was the minister who was leading the charge lose his seat and indeed the Court government lose the election. So scandalous was that behaviour, so scandalous was their refusal and failure to act that this ended up in a royal commission. The taxpayers of Western Australia ended up paying tens of millions of dollars in compensation. Quite clearly there was a major regulatory failure.

In Western Australia we had a heightened sensitivity to this, so when we saw a new scheme developing in 2002 we were very concerned. This was a mezzanine finance scheme—one that has been described here today as something of a Ponzi scheme. The first company to be involved in this was Westminster Finance. Basically investors thought they had an investment secured by property. They did not. In August 2002, the consumer protection department wrote to ASIC, and it also raised it at ministerial meetings. It was trying to get action. But nothing happened. They could not get the federal government or federal agencies to act. So in May 2003, the then minister for consumer protection, John Kobelke, wrote to his counterpart, Senator Ian Campbell, who was Parliamentary Secretary to the Treasurer, alerting him to this particular problem. I will just quote John here, because it really goes to the heart of it:

I expressed concern at the level of risk posed to inexperienced investors, many of whom are self-funded retirees who were approached by the company. The fact that the company was soliciting people to invest in it was a new element

that I will expand upon in a moment.

Accordingly, he went and raised with Senator Campbell the need for urgent action. Nothing happened. So in June he wrote again and said, 'We have received your letter, but this requires urgent attention.' And over the following years the department of consumer protection continued to take this matter up, and nothing happened. Then in 2006, lo and behold, the whole scheme collapsed. You must take responsibility for it—you have form on this matter. (Time expired)

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