Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I'm now speaking to the amendments moved by Senator Whish-Wilson. The government will be opposing this amendment. The government considers the civil penalties are set up at an appropriate level to provide a strong deterrent for poor behaviour by banks. These penalties equate to maximums of $10.5 million for small authorised deposit-taking institutions, $52.5 million for medium-sized authorised deposit-taking institutions and $210 million for large authorised deposit-taking institutions. These are tough penalties and substantially higher than the penalties generally available under the Commonwealth legislation. They provide a clear incentive for banks to ensure they comply with the requirements of the Banking Executive Accountability Regime. In contrast, the penalties proposed in this amendment would, in many cases, grossly exceed the maximum penalties currently provided for under the Banking Executive Accountability Regime. For example, for large authorised deposit-taking institutions, the maximum penalty would increase from $210 million to over $1 billion. The maximum penalties for some small and medium authorised deposit-taking institutions would also increase under the proposed amendment. The Banking Executive Accountability Regime has been carefully calibrated to operate proportionately across banks of different sizes. This amendment would adjust that calibration to the detriment of the small and medium authorised deposit-taking institutions. The civil penalties proposed by the government strike the right balance between providing a strong deterrent to poor behaviour by banks and ensuring they are proportionate to the size of authorised deposit-taking institutions.

I also reiterate that these are maximum penalties. In imposing a civil penalty, a court is required to take into account the nature of the breach of the Banking Executive Accountability Regime, the extent of loss suffered and the impact of the penalty on the viability of the bank, amongst other factors.