Stuart Robert (Fadden, Liberal Party, Assistant Treasurer) Share this | Hansard source

Let me provide some context for those opposite who question how we arrived at a regime of increasing civil penalties by 400 per cent and criminal penalties by 500 per cent. The current enforcement regime available to ASIC clearly needs to be strengthened. Everyone understands that, hence the government's move to substantially increase penalties.

The ASIC Enforcement Review Taskforce extensively reviewed this entire regime between October 2016 and December 2017. It was a substantial review across all jurisdictions, across states and territories and through different government departments. It made 50 recommendations to government to seek to address the substantial issues. On 18 April the government announced reforms to strengthen ASIC's penalty framework to combat misconduct and improve community confidence in the corporate and financial sector in response to the task force report. There is a substantial body of work that was done here to ensure that all of this was put together. This wasn't something that the government just pulled out of its hat and decided to pass amendments on. This was a considered piece of work.

That's why, in response to that task force, the government moved the substantial penalty regimes that it has. Civil penalty regimes increased fivefold—in fact, higher than fivefold, going from $200,000 to $1.05 million or three times the benefit gained, whichever is greater. And they increased for corporations by more than tenfold, with a 1,000 per cent increase from a million dollars to $10.5 million—an extraordinary increase in penalties—or, indeed, a 10 per cent turnover capped at $210 million.

At the same time, the government committed to expand the types of offences available to ASIC—for example, by expanding the number of provisions that were subject to the civil penalty—and two other reforms to modernise ASIC's enforcement regime, for example, by allowing the courts to strip contraveners of their ill-gotten gains.

There is no doubt that ASIC has been criticised publicly for not using the full extent of its powers and its penalties. There is no question about that at all. The Hayne royal commission has brought out some of the issues of the lack of enforcement power by our regulators, who sought to do a deal, as it were, rather than to prosecute and use the full power of the law. Well, the full power of the law is now being increased—substantially increased in a way not seen before, with a fivefold increase for civil penalties, a fourfold increase for criminal penalties, and, when it comes to penalties for corporations, by over tenfold. That is over 1,000 per cent—10 times the penalty.

Those opposite, whilst well-meaning, simply cannot say that the government is not acting with very strong force in increasing these penalties. We are ensuring that the penalty regime throughout the Corporations Act is extraordinary, that it's tight and that it's tough. Penalties for the most serious white-collar crimes are now bringing our penalties in strong alignment with leading global jurisdictions. That is the work that ASIC has done to get alignment across jurisdictions nationally and across jurisdictions globally.

Courts, in fact, will be empowered to consider even greater penalties where the profits from misconduct are high or where a company's annual turnover exceeds $105 million. That is a further step up again in the penalty regime. And, of course, courts will have the power to strip people of their ill-gotten gains to ensure that contraveners can no longer profit from their misconduct.

This bill includes important reforms that put consumers first. In addition to this extraordinarily strong penalty framework, the Corporations Act will be amended to ensure that courts prioritise compensating victims over collecting penalties from offenders. This is putting the compensation of victims front and centre. The Legislative and Governance Forum on Corporations was consulted on this bill. Again, the consultations by ASIC over so many months with the Legislative and Governance Forum on Corporations were front and centre in putting these substantial reforms together.

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