Chris Ketter (Queensland, Australian Labor Party) Share this | Hansard source

I can hardly think there is a case in our history where there was more justification for a royal commission. It cannot be more clear at the moment. We need to only look at the multiple inquiries of the Senate Economics References Committee, which I chair. Since 2014, there have been no fewer than five major inquiries into financial misconduct. These have included: scrutiny of financial advice, corporate tax avoidance, matters relating to credit card interest rates, forestry managed investment schemes and the parliamentary joint committee into the impairment of customer loans. All of these inquiries have related to matters which have disadvantaged thousands of Australians, taken their life savings, charged exorbitant fees, misled the customer and failed to deliver a service that would benefit the customer.

In that light, it is so disappointing to get responses from Senator Cormann in relation to the questions that were put to him. I asked about the $120 million cut to ASIC and the fact that Mr Medcraft identified, back in 2014 when these cuts occurred, that 'proactive surveillance will substantially reduce across the sectors we regulate, and in some cases stop'. Now, if that is not a case of ignoring the warnings of Mr Medcraft at the time then I do not know what is. We had a government in 2014 which proceeded with those $120 million cuts to the capacity of ASIC. Senator Cormann referred to Senate inquiries and the capability review in his response. We know the government are scrambling at the moment to look at trying to repair the damage that they have done to ASIC, but there are a number of questions to be asked, there, in relation to ASIC. We have the important position of the chairman of ASIC, which expires on 12 May, and we are still waiting to hear from the government as to who will be the replacement person for the chair position. We have seen that this government has failed to provide additional powers and penalties that were recommended by the financial system inquiry. This government is now, at the last minute, scrambling to try to head off the royal commission which has been called not only by Labor but by at least eight of the government's own backbenchers. I see in recent opinion polls that a royal commission has the support of nearly two-thirds of the Australian people, including a majority of those people who identify as coalition voters.

We know that an earlier inquiry into ASIC's performance was tabled on 26 June 2014, and just one day before that, 25 June 2014, the Senate initiated a very long and harrowing inquiry into forestry managed investment schemes—a major area of investment malpractice that fell within ASIC's regulatory purview. The committee's findings echoed those of the earlier report into ASIC that it was slow and reluctant to act on early warning signs of corporate wrongdoing. We know that ASIC has tried to improve its performance and one must commend some of the comments that have been made by Mr Medcraft, the current chair, looking at culture and then trying to address some of those issues. But it is extremely frustrating for the chair, I would imagine, to be trying to address these issues while at the same time facing $120 million in budget cuts, which he identified would affect their capacity to address these issues on behalf of the Australian people.

I believe that Australians are not being served under our current regulatory framework and that much needs to be done to correct this. Matters that have been raised before the Senate committees have been widespread and pernicious. They indicate systemic abuse under a lax regulatory environment by our trusted financial institutions for the benefit of their shareholders and no-one else. The Turnbull government's response to date has been one that we might expect of someone who is, himself, an ex-banker. If today's Australian Financial Review is to be believed, the government is scrambling around to try and put together a convincing set of actions to avert the royal commission that most Australians want. We need to urgently close down this issue once and for all, and this can only be achieved if the government appoints a royal commission into the banks.

Question agreed to.