Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

I instigated this inquiry by the Senate Economics References Committee into forestry managed investment schemes. I cannot think of a bigger financial catastrophe in this country than these schemes. Four billion dollars was lost on investment in forestry managed investment schemes, billions of dollars of tax was avoided, and hundreds of thousands of Australians have lost their life savings. An industry that was supposed to be set up for self-reliance, that used these incentives to invest in trees, was decimated. Those trees were sold at a few cents to the dollar to foreign interests.

Looking back at it, this was Australia's GFC moment. We had a complex, toxic product that blew up in the face of investors and a few people made a lot of money out of it. Whether they were financial planners, accountants, the promotors of these schemes, the forestry managed investment scheme companies themselves or listed stock market companies, a few people made a lot of money but lots of Australians lost not only their life savings but also their homes. Almost no-one has been brought to account on what I think is probably the largest financial scandal in this country's history.

I have seen the effects in my community in Tasmania: farmers with hundreds of thousands of hectares of trees they cannot touch, that are essentially valueless. What have we done to learn the lessons of history? The Senate did a good job looking at this. Unfortunately, it did not go far enough. The only way to prevent the same kind of catastrophe from occurring again is to remove the up-front tax deductions on these schemes which led to the rorts. We need a royal commission to get to the bottom of this. There are so many institutions and people involved in this—let alone CommInsure, Commonwealth Bank, National Australia Bank, Macquarie Bank and all the other scandals we have heard about in this chamber that the economics committee have examined.

The financial services industry in this country has a culture problem. The only way we are going to get to the bottom of that culture problem and make sure that we have the right laws in place—as you know, Mr Acting Deputy President Williams—is a royal commission, because it has the investigative powers and the resources to call the witnesses that this economics committee, unfortunately, was either unable or unwilling to call. That includes the accountants, the financial planners, the CEOs of companies and the former ministers who sat on their hands when the bells were being rung, that led to this catastrophe. If we do not learn the lessons of history, we are bound to repeat them. It is absolutely essential that we back former Senator Mark Bishop, of the Labor Party who, nine months ago, called for a royal commission into financial services. We need it now. I seek leave to continue my remarks later.

Leave granted.

Sitting suspended from 19:00 to 19:30