Tim Wilson (Goldstein, Liberal Party) Share this | Hansard source

It's wonderful to follow the former deputy chair of the House of Representatives Standing Committee on Economics, the member for Kingsford Smith, in speaking on this legislation. I suspect he was sacked from that job by his Labor colleagues on the basis that he wasn't prepared to stand up to the committee's chair in the last term of parliament successfully, as we drew attention to the dishonesty and misinformation that was promoted by the Labor Party regarding its campaign to whack a massive, great, big, new tax on Australian retirees.

This is a particularly sore point in the context of this legislation, because it comes back to financial regulation and financial security, which APRA oversees. Before the last election we had the Labor Party going out and smearing me and others—Australian retirees—who dared to stand up and say that if a Labor government was elected people would lose a third of their income overnight if they were an Australian self-funded retiree. They said that was misinformation and that honesty goes to the heart of the confidence you can have in the retirement security system. They said that it was misinformation, that it wasn't true, that people were exempt. They would never own up—until they lost the election, in part because of that very issue. They have now had to concede that they're not going to prosecute—or they claim they're not going to prosecute—that agenda again. But they've given themselves wiggle room. Don't misunderstand them: they want to come after Australian retirees and do a hit job on their security again.

The now Leader of the Opposition conceded after the election that, actually, they were going to hit some people who were on low incomes. In fact, what we on the economics committee said at the time was right, that the consequence of a Labor government was going to be the pushing of Australian retirees beneath the poverty line. That would have been a disgraceful action that needs to be exposed and called out. There is nothing worse than centralised authority taking from Australians their hard-earned living, their own security, through a dishonest misinformation campaign that tries to suggest that somehow they are the benefactors of public largesse. That's what this legislation ultimately goes to. Yes, it's a rudimentary piece of administrative legislation around who pays what to manage and operate our financial regulators—notably APRA. But it's about what capacity they then have to do their job to make sure we have security, trust and honesty at the heart of our financial services system.

As members in this place will know, in the last term of parliament, the then Treasurer and now Prime Minister commissioned the economics committee to have regular oversight of the four major banks. Under the stewardship of the two previous chairs as well as myself, we held regular hearings into the four major banks to reveal and uncover misconduct and questionable practice to make sure that they are properly held to account as part of a stable financial system. We had a royal commission organised by the former Prime Minister Malcolm Turnbull which revealed further misconduct and questionable practices across the board. As a consequence, the economics committee in this term of parliament has been given a term-long inquiry to oversight the ongoing implementation and, of cause, to continue to question the financial services sector about their conduct and make sure that trust, security and confidence can be at its heart.

We have already done so and will continue to do so. Nearly one year into this inquiry, we have already revealed industry funds deliberately reactivating accounts and transferring money between themselves and into their group AUSfund so that they can harvest the hardworking savings of Australians to reactivate their accounts to harvest them for insurance and fees. Because of the work of the economics committee, the parliament has now taken action to shut down that practice for industry super to harvest low-balance inactive accounts.

Of course, we've continued to look at the misconduct in other sectors. We returned to the banks and have looked specifically at some of the challenges we've faced around ME Bank, a wholly owned subsidiary of industry super funds that for five months had been conspiring to close down the account options of the people whose money they were entrusted to hold by closing down their regional facilities. For five months, they knew they wanted to do this—contestability longer—and never once did it enter their minds that they should turn around to those Australians who entrusted their money with ME Bank and tell them that they're going to shut down their options. For a not-for-profit bank that's supposed to be there to help its customers, you've got to question where their priorities sit. Worse: they told ASIC, the regulator, about the plan and ASIC said, 'If you go down this path, you have an obligation to tell customers that you are going to shut down their options and design a strategy.' To be fair to ME Bank, they did have a strategy. It was to impose silence and implement communications after they had shut down those options.

This is the misconduct that we continue to pursue through the economics committee, to make sure that there's proper accountability working with APRA and ASIC to make sure that there's accountability in our financial services system. But there is a long way to go and, trust me, I can assure you there is a long way to go. What we continue to unveil—whether it is the deliberate intention of transferring money through low-balance inactive accounts to harvest for unnecessary fees and industry super's fees-for-no-service moments or it is the misconduct of ME Bank that they then misled the parliament and the committee until the regulator exposed their dishonesty—raises broader questions about the conduct of some sectors that have gotten a free ride.

We haven't just looked at super. We've asked difficult and challenging questions of the banks—the major banks. The economics committee asked—in fact, I, as chair was the first person to ask—Westpac about their issues with AUSTRAC, which later led to the downfall of Brian Hartzer. We've spoken to the small banks, particularly around some of the challenges that they're facing but also to make sure that both they and the major banks are doing the right thing by small businesses and making sure they're passing through the cost benefits of low-cost routing. And that isn't over yet, either. In fact, in the lead-up to the next hearing on the Reserve Bank of Australia and their payment systems, I want to make sure that it's clear that we expect banks to be able to pass on to small businesses lower-cost options, rather than those being provided only to larger institutions and larger customers.

And, yes, we've looked at retail super. One of the first actions we took at the end of the last round of hearings, late last year, was to put on notice one of the largest retail super funds, AMP, that they would be recalled and there'd be an expectation that they would continue to answer questions over past conduct but also their conduct into the future.

Recently we had the insurance sector before us and we've continued to provide questions on notice to them as well, about making sure they're passing through any cost savings on insurance products to Australians who don't need extra costs associated with risk, as a consequence of the COVID-19 pandemic. If you can't drive your car to work, why does the cost of your car insurance stay the same? If you're a small business that can't open your doors, then why are you paying the full cost of public liability insurance or other types of insurance to do with having customers? Those cost savings should be passed on. If you've got a travel insurance product and you can't go overseas, then you should get a full refund during this pandemic period.

While there are some people who go around deliberately slurring the work of the committee by saying we are focusing singularly, I can assure you: to the Labor members—even though I don't always agree with their line of questioning—we give full ambit, to make sure that we challenge every part of our financial services system so that it's acting in the best interests of the Australian consumer, unapologetically. And our expectation is that APRA and ASIC do the same.

I will say that I actually have some concerns around the practical operation of this bill because, while it is a good thing that the burden of responsibility for covering the costs of APRA is shared, one of the biggest concerns I have out of the royal commission is the broad capture that occurs between financial institutions and the regulators. We should never allow a situation where the heavy burden of the cost of running the regulator falls onto too few hands and shoulders because, when it does, it raises questions about whether the regulators are prepared to use the full extent of their powers against those who are, ultimately, compelled to feed them.

So, while I support this piece of legislation, I make it clear: we are watching you, APRA, and we are watching you, ASIC, to make sure that you are doing your job. You are entrusted, on behalf of the people of Australia and this parliament, with holding our financial institutions to account—and let me make it clear: all financial institutions. It's not just about pursuing the easy wins that appear in the newspapers from time to time, where you can take legal cases to represent activity and responsiveness. The expectation is: where there is misconduct, it will be revealed; where institutions mismanage, you will pursue them. And that goes across the whole structure of the financial services system.

I go back to the example I used just before, of ME Bank. When I look at some of the questions on notice to them that I have submitted as chair and then at the answers they have provided, it is increasingly clear to me that there are questionable financial practices within that institution, and I will have more to say about that in the future. That underlies the valuations and the assets of funds, and the retirement security that Australians have, that leads to the financial stability of the nation. APRA has a job to do to make sure that those valuations are credible. It has a responsibility to make sure that, when reports are audited, they're factual, they're evidence based, they're credible and they're comparable to other financial institutions, and that nobody is cooking the books. Anybody who thinks that simply asking questions on these important matters is an inappropriate use of this parliament's time or the committee's time is delusional, because, when you turn a blind eye to the conduct that we are supposed to be inquiring into, that is where misconduct festers. It is not in light; it is in darkness. It's what people think that they can get away with.

We saw that at the last election. Labor thought they could get away with removing up to a third of the income of Australian retirees. The economics committee provided a platform for Australian retirees to stand up and speak out and to highlight the misinformation—where people who had sacrificed their whole lives, who were living on marginal incomes, were going to be pushed below the poverty line; where families that had set up small pools of shares to support loved ones into the future were going to be robbed; and, where Australian retirees thought they could turn to security, it would have been denied. It exposed a difficult truth. Regulators have the job to expose difficult truths too—to tell the truth and to bring light to dark places. In passing this legislation, we should expect APRA to stand up and step up.

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