Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Hansard source

The Australian government does recognise that there has been malfeasance and bad behaviour in the financial services sector. We know that the sector has not always lived up to the expectations of the Australian people. That is why it is this side of the House that is delivering the most significant package of reforms that this parliament has seen, and that is why it is this side of the House that held a root and branch review of the financial system—the Murray financial system inquiry.

Now, did those opposite join us in wanting to hold this root and branch review of the financial system? Did they support us in these endeavours? No, they did not. In fact, they opposed it. On coming into government they opposed our measures. In fact, when the member for McMahon was the Treasurer, he said:

The financial system is strong, well-regulated and well managed and I have not seen a case for a full-blown inquiry.

This is despite the fact that there were so many financial planning scandals during that time. In fact, during the time that the member for McMahon was the Assistant Treasurer, and also the Minister for Financial Services—for more than 1,000 days, when he had the power to propose inquiries, to actually do something in this space—the member for Maribyrnong, the Leader of the Opposition, stood here at the dispatch box with such confected outrage and said that he would have done something if only he had been given the chance. Well, he had that chance when he was the Minister for Financial Services and Superannuation, for nearly three years—more than 1,000 days. He too could have done something at a time when there were financial scandals.

And let me go through them: at the time of their government, there was Opes Prime, there was Storm Financial, there was Trio Capital, there was Great Southern group, there were the scandals within CBA financial planning, there was MF Global and Macquarie Equity Limited, there was Banksia. Yet those opposite did not call for a royal commission at that time. In fact, they said that the whole system was incredibly well regulated and that there was nothing to see. Well, in fact on this side we know that action does need to be taken. We know that the complaints handling for those people who have consumer complaints is simply not good enough. People do need access to justice in a really timely manner. They need to know that their complaints can be heard and that they can access appropriate compensation. We have seen the Financial Ombudsman Service apply only to a certain number of people, and we are looking to expand that—and not only to expand it but to see whether there should be a one-stop shop for the Financial Ombudsman Service, the Credit and Investments Ombudsman and also the Superannuation Complaints Tribunal so that not one consumer falls through the cracks, so that every single one of those people who has a legitimate complaint can be heard and can access appropriate compensation.

That is why this side of the House has instituted the Ramsay review, so that we can get the governance structure right so that it will not be years from now that people can access justice but will be in the very near future that they will be able to access justice through a one-stop shop. And when we think about consumer complaints, I think it is worth noting that the highest number of consumer complaints to the Financial Ombudsman Service occurred at a time that the Leader of the Opposition was in fact the Minister for Financial Services—more than 36,000 complaints at that time. It has, in fact, gone down since then and it is due to the very hard work of putting in place the appropriate changes in regulation and strengthening our regulator that we have seen that number go down.

We have invested very heavily in our regulator. We know that the regulator needed additional capability and additional resources. That is why we have provided them with significant funding not only to chase down those people who have done the wrong thing but also to be far more proactive in detecting problems before they occur and to stop consumer harm before it actually happens. That is why we have also provided ASIC with $9.2 million in funding to accelerate the implementation of a product intervention power for ASIC, so that they can intervene before the harm is done. That is why we have given them more than $61 million to enhance their data analytics and surveillance capabilities and improve their information management systems. That is why we have given them more than $57 million for more surveillance and enforcement activities, particularly in the areas of financial advice, responsible lending, life insurance and breach reporting.

We know that it is very important that we have a tough cop on the beat. On this side of the House, we are not frightened of a tough cop on the beat like those opposite, who are opposing us having a tough cop on the beat with the ABCC. We believe it is important and that is why we have given ASIC appropriate powers.

What would happen if a royal commission actually went ahead? If it went ahead, there would be no legislation that deals with the misalignment of incentives in the life insurance sector, there would be no legislation that lifts the education and professional standards of financial advisers, there would be no changes to current framework for dispute resolution, there would be no one-stop shop for the consumers to get access to justice easily and to access compensation, and there would be no process by which the banks would be held to account by the House of Representatives Standing Committee on Economics for the decisions that they make—decisions that affect all Australian consumers.

We believe it is also important that we take action now to ensure that those people who have suffered harm are properly heard. That is why the Minister for Small Business and I took action in making sure that the Australian Small Business and Family Enterprise Ombudsman could provide a forensic review of the most egregious cases that were presented before the parliamentary joint committee and to make sure that they could go through, in very minute detail, where the problems have occurred and, if so, what they were, to prevent harm going forward. This is a very, very important review.

The Australian Small Business and Family Enterprise Ombudsman is an ombudsman with very significant powers; powers to compel documents from the banks, powers to compel the banks to come before the ombudsman to provide direct information on these very, very specific cases. It is incredibly important that those people who have been harmed by bad behaviour can access justice in a timely manner.

What did those opposite to during their time when they had the ability to take action? They did very little at all. As recently as 2015, they certainly did not support Senator Whish-Wilson when he stood up there in the Senate and proposed a royal commission. In fact, they opposed that and opposed that very directly. They opposed it because they do not really believe it is necessary and they are putting their political interest ahead of the national interest. A royal commission, in fact, is very dangerous because it would send signals to people overseas that they cannot trust our banking system here in Australia, that there are structural problems with the banking system. It would have significant repercussions for confidence. It would have significant repercussions for international investment and it would have very significant repercussions for our AAA credit rating.

Those opposite want to play populist politics with a very serious issue. Those on this side of the House are keen to address the significant issues that we know are relevant for individuals to be dealt with today, to be dealt with now, not three years from now. On that note, I would like to commend to the House the need to ensure that those opposite do not succeed in their plan.

See this speech in context