Jane Hume (Victoria, Liberal Party) Share this | Hansard source

Nobody wants to attend an inquiry where they feel they are part of a witch-hunt, yet the banks and the financial services organisations have approached these inquiries with an open mind and have been extraordinarily candid and extremely helpful. I do not think we could be expecting any more of them than they are giving us now. The first of those hearings was held on 4 to 6 October last year and 3 to 8 March this year, respectively, and the committee has already tabled its first final report in November 2016.

The Turnbull government has also commissioned a number of critical reviews, including the Ramsay review of the financial system's external dispute resolution, EDR, framework, headed by Ian Ramsay, a man of great respect and admiration on both sides of the chamber. The government has committed to establishing a one-stop-shop dispute resolution scheme that will provide consumers with independent and timely access to justice and access to compensation where appropriate. The Ramsay review released its interim report in December 2016 and it will produce its two final reports to government in March and June this year.

The government has also commissioned a review into the small business lending practices of the major banks—the Carnell review. The government has released the Carnell report and the government response. It released those on 3 February this year. The Carnell report makes 15 separate recommendations, four of which are for the government and the remaining 11 are directed to the banking industry itself. Those recommendations are targeting where reforms need to be made.

In total, the inquiry considered 23 of the most egregious cases that were presented to the Parliamentary Joint Committee on Corporations and Financial Services inquiry into the impairment of customer loans. Of those cases, a third were a result of poor business decisions, another third were a result of both poor business decisions and poor bank practices, and the final third were representative of poor bank practices and possible unconscionable conduct on the part of the banks involved. The Carnell report has addressed those specific cases.

In respect of the recommendations for the banking industry, the government expects the industry to give the highest priority to very careful consideration of the 11 recommendations that focus on changes to the way banks deal with their small business customers and to provide a considered response to the report and a proposed plan of action to address the issues of concern raised in the report. In respect of the recommendations for government, the Carnell report provides further support for the establishment of the one-stop-shop EDR scheme that I mentioned earlier. That has already been agreed by the government. The government has extended and strengthened the Ramsay review terms of reference to allow that expert panel to make recommendations, rather than observations, on the merits and potential design of a last-resort compensation scheme and to consider the merits and issues involved in providing access to redress for past disputes as well. Finally, the report on extended issues will be delivered by the end of June this year.

The Turnbull coalition government has also commissioned a review of the specific allegations made against CommInsure—this is a very high-profile case; it was on the 7.30 report and has been in an awful lot of financial media as well as mainstream media—and also the broader insurance sector. ASIC released its report on the sector on 12 October 2016 and it will produce its findings on the CommInsure matter in the first quarter of 2017 as part of the ASIC reviews.

In response to the financial system inquiry, the Murray inquiry, the Turnbull government has announced the terms of reference for an ASIC enforcement task force, which is currently reviewing ASIC's enforcement and penalty powers, which is something Senator Whish-Wilson mentioned, and will report to the government in the second half of this year. Finally, it is worth mentioning also that the Minister for Finance, Senator Cormann, on behalf of the Turnbull government, recently announced the Open Government Partnership National Action Plan. This is a very ambitious plan that includes action across a broad spectrum of very important areas of government and, importantly, it commits to review and consult on the new whistleblower protection regime in the tax fraud area, which is again something Senator Whish-Wilson referred to in his broad terms of reference. This is something the government is already dealing with. That new whistleblower protection regime will provide significant enhancements to the current corporate whistleblower protection regime.

There are, as mentioned, 17 current or past parliamentary Senate, joint or House inquiries into the banking sector and financial services. My committee, the Senate Economics Legislation Committee, is considering a number of them as we speak. One thing Senator Whish-Wilson wants to cover is white-collar crime. We are already covering white-collar crime. We are looking at criminal, civil and administrative penalties for white-collar crime. The reporting date is 23 March. If you can just wait a day, Senator Whish-Wilson, we will have an answer and a report for you.

We are looking at Australia's general insurance industry. That report is due on 22 June. Again, this parliament is already looking at these issues. We have already looked at the scrutiny of financial advice. The reporting date for that is 30 June this year. Finally, as Senator Gallagher will well know, we are looking at consumer protection in the banking, insurance and financial sector. Again, it is another inquiry with very broad terms of reference. This parliament is already dealing with these issues. It is unnecessary to take it to a further inquiry with royal commission powers or a commission of inquiry.

The financial system inquiry, the Murray inquiry, the inquiry that Labor said was unnecessary, was unprecedented in its breadth, was very thorough, was highly comprehensive and was very well received by industry and by consumers. The Turnbull government's response to the FSI has been also equally wide ranging, comprehensive, extremely well considered and timely. There are an awful lot of recommendations in that report and the vast majority of them have been taken on board. They have been considered and they have been dealt with in a timely and comprehensive manner.

If a royal commission or a commission of inquiry goes ahead, all of these important initiatives will be delayed indefinitely. We will be plagued by inertia waiting for yet another inquiry—an incredibly expensive and totally unnecessary inquiry. A royal commission or a parliamentary commission of inquiry will cost the taxpayers millions and millions of dollars. It will take so many years to complete. It will undermine the confidence in our banking sector and our banking system. It will harm investment in the system itself and investment in the economy and, most importantly, it will risk our AAA credit rating. It is a witch-hunt; you are after a witch-hunt. It is totally unproductive. It will do nothing to assist consumers in any practical way.

Senator Whish-Wilson interjecting—

You are absolutely right, Senator Whish-Wilson, when you say this Prime Minister has no intention of holding a royal commission into the banking and financial services industry. You are absolutely right when you say this Prime Minister has no intention of holding a parliamentary inquiry into the banking and financial services sector. You have said that the executive will not act. On the contrary, this government is acting right now to respond to those 17 inquiries that you referred to. It is acting right now to strengthen our financial system. It is acting right now with funding to ASIC. It is acting right now with critical reviews into small business sectors. It is acting right now with critical reviews into white collar crime and the ERD framework.

This government is focused on implementing the reforms that are needed to strengthen the financial system, not risking delay to those reforms by holding unnecessary, expensive, time-consuming inquiries which are populist politics and a waste of taxpayers' resources. How many of these discussions do we need to have? How many of these discussions do we need to go through? Just in the economics references committee we have so many of these inquiries.

Senator Whish-Wilson interjecting—

Senator Whish-Wilson is involved with many of these inquiries—and yet he wants more.

Senator Whish-Wilson interjecting—

Senator Whish-Wilson has the opportunity to commit to those inquiries, to attend those inquiries, to hear from the witnesses who are in front of those inquiries and to contribute to the reports—and yet he wants more. This is yet another popular stunt. In the past, it was the Labor Party that put the kibosh on the Murray inquiry. Now they disingenuously call for a banking royal commission and the Greens are calling for a parliamentary inquiry. When does this end? Let this government focus on implementing the reforms needed to strengthen the financial system rather than risking further delay to those reforms by holding unnecessary, expensive, time-consuming, populist politics driven inquiries.