Andrew Wallace (Fisher, Liberal National Party) Share this | Hansard source

Australia can be proud and should be proud of a strong financial services sector that is operating in this country. It boosts productivity, bolsters businesses and supports aspiration. This sector helps Australians to realise that great dream of home ownership, starting a business, raising a family and retiring in confidence, security and comfort. Our financial services sector has weathered the storms of global conflict and supply chain issues. It has endured the sharpest economic decline in generations, thanks to global pandemic. And while populist leaders imposed financial measures which dragged nations left, right and down, the previous Coalition government's calm and steady economic management, in cooperation with financial services not against them, meant that Australians were insulated from a large part of the economic challenges.

We've seen this play out at the local level as well. My electorate on the Sunshine Coast has reaped the reward of a strong finance sector. Core and contributory financial services employ nearly 4,000 Sunshine Coast locals. That's 4,000 Sunshine Coast residents in work because of sound economic management. Thousands of households are better off because of the coalition's hard work between the day Labor was turfed out of office and May 2022. It's a sector which adds just shy of $833 million to our local Sunshine Coast economy through 1,400 businesses. That is nearly $1 billion flowing through local small businesses and local supply chains into the pockets of hard-working Australians.

A strong financial services sector is an essential cornerstone of Australia's resilient and adaptable economy. It's important that it stays this way. That's why I'm pleased to speak on this package today. I'm especially pleased that once again this comes on the back of the coalition's hard work. In many ways, this is another coalition carbon-copy piece of legislation. As families and businesses in Fisher know too well, a coalition carbon copy is the only kind of carbon policy Australians wanted to hear about from this federal Labor government—not a carbon tax, not a climate warrior training program, not taxes, tariffs, pledges or platitudes. They want sound economic management to lift them out of Labor's cost-of-living crisis. That means we must support our financial services sector by promoting integrity, clarifying accountability mechanisms and putting an end to Labor's dithering and delays. To that end, the coalition will not delay the progress of the bill through parliament.

The legislation we're debating establishes a financial services compensation scheme of last resort for victims of financial misconduct. It also expands the Banking Executive Accountability Regime, the BEAR, more broadly across the financial services industry under the Financial Accountability Regime, the FAR. This legislation forms the final elements of the response to the landmark Royal Commission into Misconduct in the Banking, Superannuation and Finance Services Industry. The coalition committed to taking action on all 76 recommendations and additional commitments contained in the final report. This was a response and royal commission launched by the coalition when we were in government, and we're happy for Labor to continue our work. It just shows that only the coalition has a plan for our economy, only the coalition has a plan for Australian industry and only the coalition has a plan to create more jobs and put more money back into the pockets of hardworking Australians.

This Labor government has lost control of its ability to govern. We saw it this year with the mishandling of the previous version of this legislative package. These are bills which the coalition put forward before the election. One would think these would be straightforward pieces of legislation, but apparently not. That this is the second time we're debating this is proof of that. Last year, without consultation or warning, or even a media release, the Assistant Treasurer chose to unilaterally implement $1.1 million worth of fines on executives in the financial services industry. We're not just talking about the executives in big-city, top-level offices; we're talking about local credit unions, cooperatives, regional banks and small lenders. When they were promising their way to the halls of power, this federal Labor government promised that they would work with the private sector. They promised that they would consult. They promised that they would listen. Every step of the way, small and family businesses and industry have been shut out of this conversation. They have been cast aside, now that the election has been done and dusted. They have been kept in the dark on crucial issues of workplace relations and the Labor government's agenda. Those opposite promised certainty and collaboration, and they've delivered instability and isolation. Week by week we're treated to farcical debates from those opposite on half-baked bills. That's if they don't copy ours. Even when they do copy coalition policy, they struggle to bring it to the finish line.

The way this legislation has been handled is another example of this incompetent, indifferent and ignorant Labor government fumbling its way through the dark. Once again, it takes the coalition to turn on the lights, it takes the coalition to clear the way and it takes the coalition to shine a light on another dropped ball, another failure in leadership from the Albanese government. You can't bind a small business in red tape without warning and then rip it off because you've changed your mind. That kind of ineptitude destabilises industries, cripples companies and hurts Australians' wallets. It does what we see Labor's dithering is doing today. It exacerbates the cost-of-living crisis that Australian families and their businesses are contending with. Certainty and cooperation are the foundation of good economic management. They promised consultation, and instead we're getting absolute chaos.

The government has resolved several of the issues which the coalition raised when the legislation was first brought before the parliament. The reckless deal they struck with the Greens to impose civil penalties, only to then backout of it, remains excluded. The bill now extends the payment period for the compensation scheme of last resort one-off levy, giving the top 10 financial services organisations two years to pay this one-off levy. This is an important step if we want to provide certainty for our largest institutions. After a lengthy and extensive campaign from this side of the House calling on the Labor government to do their job and consult industry stakeholders, we are pleased that the sector has now finally been heard.

Along with the Financial Sector Reform Bill, the legislation contains a number of provisions which will impose four core sets of obligations on accountable entities. The first, accountability obligations; second, key personnel obligations; third, deferred remuneration obligations; and forth, notification obligations. Most notably, the package extends the Banking Executive Accountability Regime, the BEAR, to all entities regulated by APRA. This means that banking, insurance and superannuation entities and directors will be subject to the same accountability and the same transparency standards required of financial entities covered under the existing regime.

The package also establishes the levy framework for and function of the compensation scheme of last resort. The CSLR will provide compensation to eligible consumers where they have an Australian Financial Complaints Authority determination in their favour and where the relevant financial firm has not paid the consumer in accordance with the determination. The framework also imposes a levy to fund the CSLR on an ongoing basis. It will lead to the introduction of an annual tax to be levied against relevant entities, as well as a one-off levy to be imposed over two financial years to pay for the backlog of claims from AFCA. The CSLR forms part of the final tranche of legislation to implement the coalition government's response to the Hayne royal commission.

When I was the chair of the corporations and financial services committee I had some pretty grave reservations about the introduction of a compensation scheme of last resort, and quite frankly I still do. We need to be very careful that government doesn't just keep stepping in on all occasions saving people from themselves. Some people will make poor decisions. Some people will make poor decisions based on poor advice. What we need to be careful of in this country is that we don't try and de-risk everything, because ultimately if we try and de-risk everything we demotivate the concept of investment. Everybody would invest if there was no risk, but the likely rewards from those investments, in my view, are likely to be diminished as a result. And of course, we also have the costs of paying for the levies. Let's not be naive about this, the levies that will be paid by the relevant institutions—ultimately it's the punters that're going to pay for these things through increased charges. So whilst I support the legislation, as does the coalition, I just want to put it on the record that I have had concerns and I still have concerns about the concept of a compensation scheme of last resort. Where unscrupulous operators give poor advice and are not in a financial position, either them or their insurers, to be able to provide assistance to people who have been impacted upon, then, sure, it's not a bad thing. But there are broader implications for the broader economy here. I just make this point again: you can't deleverage risk from our world. We need to be very careful about how we try and do that. There is risk in everything. I think we as legislators need to be very mindful of that.

In conclusion, financial services are afforded a significant amount of trust by Australians, sometimes at their most vulnerable. They have a duty to return on that goodwill with quality service, accurate advice, sound risk management and good governance. In the past, some of these services have failed in that duty. We've all heard the evidence from the royal commission. That is why we initiated it. That's why we responded. That's why we put this legislation forward when we were in government.

Australians also put a significant amount of trust in their government, as they do in their banks. The banks have got a long way to restore Australians' faith. I say they have got a long way, not come a long way. They have come some way, but they've still got a long way to come. Australians expect quality service. They expect sound economic management. They expect good government. This federal Labor government is failing in that duty. They don't have a plan for our economy, so they are using the coalition's. It's taken them two fumbled attempts just to get it back on track—with our support, no less. Labor have demonstrated in 10 months that their priorities are out of whack with everyday Australians. They are hopelessly out of touch with the needs of Australian families.

They are patently out of their depth, with their arrogance, incompetence and indifference to the struggles of real Australians, especially in regional Australia—the same Australians that talk to me in my electorate of Fisher about how they are struggling from day to day. Everything has gone up. Electricity has gone up. Gas has gone up. Rents have gone up. Mortgages have gone up. The cost of groceries, or simply walking into a supermarket, has gone up. When was the last time you walked into a supermarket and paid under $100 for only a few groceries? This government needs to get real about the cost of living, and it needs to start pulling the right levers to assist families around Australia.

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