Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Assistant Minister for Treasury) Share this | Link to this | Hansard source

On behalf of the Standing Committee on Economics, I present the committee's report entitled Review of the Australian Securities and Investments Commission annual report 2017, together with the minutes of proceedings.

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—It is unusual for a member of the opposition to be presenting a report for the Standing Committee on Economics to the House of Representatives, but that has occurred because the government doesn't have a chair for this particular committee at the moment. That's right: the Standing Committee on Economics in the House of Representatives does not have a chair. We've been through, I think, three chairs of this committee during the term of this parliament, and we'll now go on to our fourth because the previous chair has, of course, been elevated to one of the assistant minister positions in the government as a result of the shake-up and the dethroning of the member for Wentworth as the Prime Minister, and the chaos continues in this government.

It really is symbolic and highlights very well the fact that, whilst good committees of this parliament are getting on with the job of looking into one of the most urgent matters that the parliament should be devoting a fair bit of time to at the moment, and that is the scandals and rip-offs that have been occurring in the banking and financial services sector, which are numerous, instead, the government have been focused on themselves. It's been 16 days since the coup occurred in the government, and they still haven't got around to appointing a new chair for the Standing Committee on Economics of the House of Representatives. Well, whilst they dilly-dally and whilst they fight amongst themselves, Labor is getting on with the job. It's symbolised by the fact that I am more than happy to present this report on behalf of the committee.

When this inquiry occurred on 22 June this year in Canberra, we welcomed the new Chair of ASIC, James Shipton, who'd recently been appointed to this role, in his first appearance before the committee. Unsurprisingly, most of the evidence that was taken on that day, and the questioning from members of the committee, related to the banking royal commission and ASIC's performance as a regulator. We've all seen some of the scandals and rip-offs that have occurred in this industry over the course of the last few years but in particular amongst some of the biggest financial houses, some of the most trusted banks and financial institutions in this country, which have undermined confidence in this industry. I speak, of course, of AMP, the fees-for-no-service rip-offs that have been occurring in all of the big banks, and the scandals in the banks associated with wealth management and with insurance, particularly life insurance products.

That frustration that Australians have really been feeling was perfectly summed up in a recent opinion piece that was written by Jeff Morris in April this year. It related to his experience with ASIC and the Commonwealth Bank. Jeff Morris was, of course, the person who blew the whistle on the wealth management scandal that was going on in the Commonwealth Bank. He uncovered fraud in the Commonwealth Bank, in their financial planning arm, back in October 2008. At the time, ASIC, when it launched some preliminary investigations, accepted the view of the Commonwealth Bank and basically did nothing about it. Over the course of the next couple of years, a series of a number of whistleblowers continually hounded ASIC, the regulator, to do something about what they believed was fraud going on in the Commonwealth Bank. It took the physical action of those whistleblowers walking into the offices of ASIC and demanding that the regulator take action against the Commonwealth Bank and have a look at what was going on in its wealth management arm. Thankfully, ASIC did at the time and it uncovered what led to a parliamentary inquiry and, ultimately, a royal commission into financial services and banking in this country.

In the words of Jeff Morris, the delay that occurred between 2008, when he first identified the fraud, and ASIC taking action meant 'files had been sanitised'. In June 2014 the Senate looked at the issue of what had been going on in the Commonwealth Bank, and it determined that ASIC had been 'a timid and hesitant' regulator. It was that particular inquiry that recommended a royal commission be launched into banking and financial services in this country. That committee had on it people like Senator Williams, who has been one of the few voices for the coalition calling for a royal commission for some time.

In the wake of that inquiry, what did we see? The government concluded that there was no need for a royal commission. Despite the fact that a bipartisan Senate committee had recommended a royal commission, the government concluded that there was no need for one. In his op-ed, which was printed in April of this year, Jeff Morris wrote:

Immediately the then Abbott government hosed down any prospect of a royal commission. I drove to Canberra to implore Mathias Cormann not to trust CBA.

I told him that ASIC had trusted CBA who had then made monkeys out of them. I warned him that the same thing would happen to him. It was in vain, of course, three weeks before CBA's annual general meeting, Cormann obligingly ruled out the royal commission in exchange for yet another self administered compensation scheme.

It perfectly sums up the view and frustrations of people who have been calling for action in banking and financial services for a decade now. This government did nothing about it. Even back then, when its own members were calling for a royal commission, this government did nothing about it. It stonewalled and protected its mates in the banking sector to ensure that there was not a royal commission. We've all seen the outcomes that have been uncovered. Yet another round is occurring today, with insurance under the spotlight.

Who was it that voted so many times in this place against a royal commission? Who was it that led the charge for the Abbott and Turnbull governments against a royal commission? It was none other than the new Prime Minister, the member for Cook, Scott Morrison. It was the new Prime Minister who led the opposition to a banking royal commission in this country. He ought to be ashamed of himself, based on the evidence that's being uncovered in that royal commission today. It's because of that that ASIC didn't get the resources and the funding it deserved to stop some of this action. Who knows how many thousands of Australians might not have been ripped off by the banks and some of these financial houses if the government had taken seriously the calls in the early days for a royal commission, and properly resourced ASIC? In the wake of that initial Senate inquiry report, what did the government do to the regulator? It ripped $120 million out of its budget. That saw job losses and a loss of expertise in this particular industry and in this sector, which led to a complete lack of oversight and to the rip-offs and scandals being gotten away with, and it's Australians who have suffered.

The Australian people have paid the price. All of the banks have been involved in the fees-for-no-service scandal. All of the banks have had accusations made against their insurance arms. Issues with commissions and conflicts of interests are continually being uncovered by the banking royal commission. For all of that period between 2008 up until a year or so ago, when the government finally agreed to a royal commission, thousands of Australians had been ripped off. This government should hang their heads in shame that they didn't take action when Labor was calling for it back in 2010, in the wake of that report. All of this opposition to a royal commission has been led by the current Prime Minister.

Thankfully, in the wake of all of these scandals, the government have woken up to themselves. They have restored some of the funding to ASIC, and that's been a welcome development. A second deputy commissioner to ASIC has been appointed on a full-time basis; this is something that Labor has supported. Finally, the government is giving some additional powers to ASIC and has stiffened penalties. But these are the things that should have been done some years ago. If they had been done then, many Australians would not have been ripped off. Many Australians would have a lot more money in their bank accounts, in their retirement savings accounts and in their superannuation balances. They would've had better insurance outcomes and there would've been a lot less pain and suffering for many Australians. But because the Prime Minister and members of the front bench and backbench voted so many times against the royal commission that Labor had been calling for from 2010 onwards, many Australians have suffered, and that is a great shame.

Labor stands ready to work with the government, with ASIC and with other regulators to ensure that we do have a fair dinkum set of regulations that oversee this particular industry, an area of deep concern for many Australians. Hopefully, we can restore confidence and trust in Australia's banking and financial services sector.