Ms Anna Burke (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Parliamentary Joint Committee on Corporations and Financial Services, I present the committee’s report entitled Statutory oversight of the Australian Securities and Investments Commission, together with the evidence received by the committee.

Ordered that the report be made a parliamentary paper.

One of the little-known processes of this parliament is the role of committees. Most of this work goes unnoticed, but it is a fundamental in the life of the parliamentary process because it is the only time we as parliamentarians rise above the baseness of party politics to come together and work for the good of the country. It is a sad pity, then, that the government ignores most committee reports and does not even bother to respond. Currently the government has failed to respond to 54 reports, one dating back to 1999.

I table today a unanimous report from the Joint Committee on Corporations and Financial Services into one of the committee’s primary roles, the oversight of the Australian Securities and Investments Commission. The world of joint committees and the Senate has been an interesting concept to deal with, and I wish to thank our departing secretary, Dr Anthony Marinac, for helping me through this steep learning curve and for his role in these hearings and this report. I wish to thank all the secretariat members for their work and all committee members for the way they worked in a constructive manner. Again I say we are presenting a unanimous report.

Having previously been on the House of Representatives Standing Committee on Economics, Finance and Public Administration, where the Governor of the Reserve Bank came willingly twice a year to report in his frank and open manner, I was a little taken aback with the guarded way the members of ASIC approached the oversight hearing. I would have thought it would be a prime opportunity to have an open exchange that could lead to constructive outcomes. But it does appear that the shutters were up on many occasions. Not that there was a failure by ASIC to respond to the committee’s questions, but at times they just appeared to be reluctant to be full and frank. Then I remembered that Mr Lucy and his associates are subject to Senate estimates, and I understood perhaps why they were a little wary of parliamentary questions.

The committee held two oversight hearings, as there were many issues to deal with and some topical ASIC prosecutions on foot at the time. The issue of the Vizard case was obviously gone into at length because there was much media speculation on the issue. The failure to bring criminal charges against Mr Vizard was explored at length, and a separate in camera discussion with the DPP was held to ascertain why no criminal actions were brought against Mr Vizard. At paragraph 2.18 of the report Mr Lucy is quoted as stating:

The main issue with Mr Lay was not so much about being prepared to cooperate with us and provide the necessary information we needed but rather that he was not prepared to sign a witness statement because of concerns about his own position. He indicated that for the first time when it came to the crunch in November 2004. I think it was really a period of six months, from November 2004 through to May, when we had a number of discussions with Mr Lay, his advisers and the DPP about satisfying him in relation to his own position.

Section 19 of the act would have allowed ASIC to compel Mr Lay to be subject to cross-examination under oath, just as he would have been in court. So the committee went into great detail as to why ASIC had failed to use section 19, which they had at their discretion. The argument put by both the DPP and ASIC on the failure to prosecute criminal charges against Mr Vizard is still, at best, vague and does seem to imply that more work between these agencies needs to be undertaken, particularly in light of Judge Finkelstein’s very pointed sentencing remarks. Again I quote from the report. His Honour stated:

... it is my view that a disqualification for five years is not sufficient ... a message must be sent to the business community that for white collar crime “the game is not worth the candle” ... In my view the appropriate period of disqualification is ten years. But for the factors requiring a “discount”, a much longer period would have been in order.

So it seems that more needs to be done to send the signal that white-collar crime should get more than a fine and a slap on the wrist. Insider trading is a very serious issue, and it is affecting us all. It is our super funds that are investing in these share schemes. It is individuals who are doing it, and they are being manipulated. The report makes many recommendations in respect of section 19 and the MOU between ASIC and the DPP, and I trust that the minister will pick them up.

In the time available, I also want to go at length into super choice. Recently an ASIC official got into some trouble for saying, ‘I just don’t trust them,’ of financial planners. Who do we go to? Who can we trust for advice in this day and age if ASIC is telling us not to trust financial advisers? A recent report by ASIC called Superannuation switching surveillance found that there is a great deal of concern about the advice being given to individuals to switch from one fund to another. Indeed, most of it does not even go to the fund you are going from. So they provide no investigation of where you are going from or to, or what costs are going to be involved. Nor do they disclose that they are getting licence fees from the fund they are offering you. Much more needs to be done in respect of financial literacy. Individuals need to be given appropriate advice. (Time expired)