Llew O'Brien (Wide Bay, National Party) Share this | Hansard source

As one of the National Party members who helped bring about the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, I sincerely thank the commissioner, Justice Kenneth Hayne, for his work. The Hayne royal commission was comprehensive, conducting seven rounds of public hearings over 68 days, calling more than 130 witnesses, and reviewing more than 10,000 submissions. The royal commission's final report has provided us with a forensic examination of Australia's financial system. It's important to acknowledge the significant steps and reforms the Liberal-National government made prior to the royal commission being established. These reforms include the Banking Executive Accountability Regime and the Australian Financial Complaints Authority. These reforms are important, and the work of the royal commission will uphold them both. I welcome the government's commitment to take action on all 76 recommendations of the Hayne royal commission.

I also acknowledge that in a number of these areas the government has gone further, establishing a new compensation scheme of last resort and extending the remit of the AFCA so that it is able to review claims going back 10 years and award compensation for successful claims. This is consistent with the period that was examined by the Hayne royal commission. The government is making arrangements to compensate those individuals who had a prior unpaid determination in their favour made by the predecessor bodies of the AFCA. This will provide around $30 million to compensate around 300 customers who were victims of misconduct. We are extending the jurisdiction of the Federal Court to examine corporate criminal misconduct, in order to expedite cases that are considered by state courts and can take over two years to be heard. The government's undertaking a capability review of the Australian Prudential Regulatory Authority, APRA, and will conduct further capability reviews every four years.

The royal commission's recommendations and our government's response protect the interests of consumers in four key ways: by strengthening and expanding protections for consumers, small business, and rural and remote communities; by raising accountability and governance standards; by enhancing the effectiveness of regulators; and by making remedies available for people harmed by misconduct.

I would like to turn now to the very important matter of mortgage brokers. In relation to the mortgage broking sector, the government has said that it will introduce a best interest duty and ban trailing commissions and volume-based bonuses on new loans from 1 July 2020. The government has also committed to conducting a review into the implications of moving to a 'borrower pays' remuneration structure in three years. While the government has made these commitments, I also acknowledge the Productivity Commission's concern about a borrower-pays model:

… the cost to competition would be high. Consumers would desert brokers, and smaller lenders … would suffer much more than larger lenders, if customers were required to pay for broker advice.

Mortgage brokers are a vital part of our financial industry, helping consumers to navigate the complex maze of mortgage products and helping them to select the right loan with the right payments and the right conditions to suit their circumstances. There are 16,000 mortgage brokers across Australia, who employ 27,000 Australians. More than 50 per cent of all of the residential mortgages are settled by a mortgage broker, providing vital competition for the four big banks. I've been contacted by some of the mortgage brokers in Wide Bay, and I'll be meeting with them after this week's parliamentary sitting to listen to their concerns and—as I always do—act on them.

Finally, when it comes to tightening up the banking industry, Labor has nowhere to hide. Over the six years it was in government, Labor had the chance to bring about a royal commission into the banks and failed miserably. Likewise, Bill Shorten was Minister for Financial Services and Superannuation— (Time expired)

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