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

Firstly, I thank those members who have contributed to this debate. Strong and effective financial regulators go hand in hand with a strong and effective financial system. For this reason, since coming into power this government has commissioned two fundamental reviews: first, the Financial System Inquiry in 2013, which I note was not supported by those opposite but has been very valuable; and second, the capability review of the Australian Securities and Investments Commission in 2015. Both of these reviews resulted in recommendations to strengthen ASIC—the corporate markets, financial services and consumer credit regulator. This bill implements recommendations from both of these reviews.

Schedule 1 of this bill amends the Australian Securities and Investments Commission Act 2001 to mandate that ASIC consider the effects that the performance of its functions and the exercise of its powers will have on competition in the financial system. Competition in the financial system is critical in ensuring that the system delivers good outcomes for Australia. Competition strongly disciplines businesses to lower costs associated with the delivery of products and services, engenders faster innovation and deployment of new technology, and delivers more choice and lower prices for consumers. The effects of stronger competition in the financial system are felt well beyond financial markets and into other parts of the economy. Increased competition can benefit the economy as a whole through improvements to productivity and economic growth. An explicit reference to take competition issues into account will empower ASIC to more consciously consider how its actions may impact upon competition in the financial system. This measure fulfils the government's commitment to implement recommendation 30 of the Financial System Inquiry. This recommendation stated that the government should include in ASIC's mandate a consideration of competition.

Schedule 2 of this bill amends the ASIC Act to remove the requirement for ASIC to engage staff under the Public Service Act 1999. Consequential amendments are also made to the Business Names Registration Act 2011, Corporations Act 2001 and Mutual Assistance in Business Regulation Act 1992. In order to be effective, ASIC needs to recruit staff with knowledge of financial markets and services. As opposed to other public sector agencies, ASIC is therefore often competing against the private sector when recruiting suitable staff. Removing the obligation for ASIC to engage staff under the Public Service Act means that ASIC will be able to compete more effectively for suitable staff. This measure will bring ASIC into line with other financial regulators, APRA and the RBA. Consistent with the findings of the Financial System Inquiry, recommendation 24 of the ASIC capability review report suggested that the government remove ASIC from the Public Service Act as a matter of priority to support effective recruitment and retention strategies. The government agreed with this recommendation and indicated that it would remove ASIC from the Public Service Act to support ASIC to more effectively recruit and retain staff in positions requiring specialist skills. This measure fulfils the government's commitment. ASIC staff who are APS employees immediately before the commencement of the bill on 1 July 2019 will maintain their continuity of service with ASIC but will cease to be employed under the PSA. They will be employed on the same terms and conditions and will maintain the same entitlements accrued under the ASIC Act.

In conclusion, this bill will strengthen ASIC's capabilities to ensure it is an effective regulator. It builds on other key initiatives undertaken by this government to ensure ASIC has the powers it needs to promote trust and confidence in the financial system. These initiatives include providing ASIC with a stronger funding base through implementing the industry funding model, undertaking a review to assess the suitability of the existing powers and regulatory tools available to ASIC, and appointing a new chairman to ASIC, James Shipton, who brings vast international experience to the role. I commend this bill to the House.

Question agreed to.

Bill read a second time.

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