Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Hansard source

by leave—I join with the member for Banks in congratulating and thanking Mr Medcraft for his service as the chairman of ASIC over many years and as the chief regulator of practices within the banking industry. In respect of the ASIC report, the hearing focused on competition in the banking sector and the reason for recent interest rate increases. Members of the committee probed ASIC regarding the changes to prudential rules that APRA recently introduced and the fact that many of the banks, in the wake of that, had pushed up their interest rates when APRA had given evidence previously that there was no reason for that to occur. And important discussions continued around the failures of financial advisers and investigations into the bank bill swap rate scandal.

I took the opportunity to question ASIC regarding regulatory guidance 97, which addresses how super funds and other financial products disclose their fees and costs. It's due to come into effect at the end of this month and RG 97 is not a level playing field, in effect, in that it exempts the bank super fund platforms. In essence, ASIC wanted to make sure that the fees and costs of interposed entities were consistently reported across managed funds and the super sector. However, in practice, super fund platforms were exempted and additional fees and costs from the interposed vehicles associated with platforms are exempted. Since the platform will only include fees and costs of the platform, and the investor will have to get the fees and costs of their various investments made through a platform from another source, this means that bank owned super investment platforms are going to look artificially cheaper. There are a lot of investments that are subject to platform exemption and estimates are that up to $500 billion in assets are managed under platforms. Mr Kell admitted and told the committee that RG 97 had been a point of contention. There had been numerous articles in the media but, nonetheless, ASIC was working to ensure that there weren't any differences and that the platforms acted equally.

In respect of the banking inquiry, this was the third round of hearings with the bank CEOs appearing before the economics committee. It possibly could be the last, given that the Turnbull government has agreed to a royal commission. For 600 days the Prime Minister and representatives of the government ignored the pleas of victims, ignored the pleas of whistleblowers and ignored people who had been calling for a banking royal commission—indeed, many of the Liberal and National Party MPs. The call for a royal commission originally came from a Senate inquiry into wealth management scandals at the Commonwealth Bank, and it was Labor and National Party MPs that recommended a royal commission to government. The government ignored that recommendation for 600 days. Then, of course, the bank executives wrote to the government, and the government rolled over and have given us a royal commission.

Labor members of the committee made a number of recommendations in a dissenting report in respect of the banks. The government should appoint more commissioners to deal with the royal commission workload. They've only got a year to deal with this and they're going to have to take a heck of a lot of evidence on all of the scandals that have occurred in wealth management and insurance and on the AUSTRAC issues and other areas of banking, so they need to appoint more commissioners. The government should extend the terms of reference for the royal commission to include matters that look at the treatment of victims, in particular, but also at the culture of banks, executive remuneration, consultation with victims groups, protection for whistleblowers, regulation and oversight, the conduct of liquidators where they relate to the financial services sector and what's going on internationally and whether or not regulation is adequate. Once again, I thank the members of the committee and the secretariat and those that were involved in these hearings.

See this speech in context