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

I rise to speak on the matter of public importance proposed by Senator Collins, but before I do I would like to remind the chamber of a little bit of history. The Labor Party had six years in government—six years in government—in which they could have called a royal commission. In fact, so many of the incidents that Commissioner Hayne heard about when the royal commission hearings were underway in the last 12 months occurred under Labor's watch. It was in fact the current opposition leader, Mr Shorten, who was at the time the Minister for Financial Services and Superannuation. Despite all of this going on under his nose—despite the financial scandals of Trio, Storm and Opes Prime—not only did the Labor Party not call for a banking royal commission; in fact, they defended themselves against one. In fact, Mr Shorten, who was, I remind the chamber, at the time the Minister for Financial Services and Superannuation, said at the time:

Australia has some of the best banks in the world. It is partly because of our excellent regulatory system and prudent management.

That was Mr Shorten, quoted in The Australian in February 2012. So it's ironic, hypocritical and highly convenient that the Labor Party would now start wagging the finger at the coalition—the coalition who did in fact announce a royal commission into the banking sector, in November 2017. In the last 12 months we've had 68 days of hearings and heard from 130 witnesses, and more than 10,000 submissions have been accepted.

But that wasn't the beginning of the coalition's attention towards the banking sector. In fact, the moment we came to government the Financial System Inquiry was commenced. I might add: that was against the will of the Labor Party. That was in December 2013. The Murray inquiry was one of the most far-reaching inquiries into the financial sector in decades.

We also, I will remind the chamber, brought in the Banking Executive Accountability Regime, known as the BEAR, which came into effect from July last year. Once again, we brought the Labor Party along with us on these reforms, kicking and screaming.

Indeed, the pattern repeats itself again. The Australian Financial Complaints Authority, AFCA, began last year, in November. And, on top of that, additional funding of $170 million has been provided to the regulators, to ASIC and APRA, and also to the Commonwealth Director of Public Prosecutions and the Federal Court, so that they can effectively pursue misconduct in this sector. Additionally, the coalition appointed a new chair of ASIC and new deputy chairs of ASIC and APRA. So action had been taken well before the banking royal commission was even called.

That said, the royal commission itself was an important undertaking. Commissioner Hayne found that the financial sector misconduct had been driven by a culture of greed in the pursuit of short-term profit ahead of the interests of customers. In fact, the commissioner's own words were:

There can be no doubt that the primary responsibility for misconduct in the financial services industry lies with the entities concerned, and … their boards and senior management.

Of course, the irony now is that the Labor Party is calling for legislative change but Commissioner Hayne in fact said that more often than not the conduct that was condemned was contrary to existing laws; they simply weren't officially enforced.

Commissioner Hayne made 76 recommendations, 40 of which require legislative change. I understand the convenience of suggesting haste in making those 40 legislative changes, but those opposite know full well that making appropriate, considered, measured legislative change can't be done in an extra fortnight of sittings. Where's the stakeholder engagement? Where's the consultation process? If we don't want to risk unintended consequences that would have negative effects for consumers—that wouldn't protect consumers but would have negative effects on consumers—then these things will take a little more time. A knee-jerk reaction will do no good for anyone.

Those 76 recommendations—and the government has committed to acting on all of them—fall into four different areas: improving outcomes for consumers, enhancing the accountability of the industry, ensuring strong and effective regulators, and providing redress for those who have been most harmed by misconduct. However, the government not only has said it will take action on all 76 recommendations but has expanded the Federal Court's jurisdiction to incorporate criminal misconduct and it's also expanded the BEAR, the Banking Executive Accountability Regime, to non-prudentially regulated entities. These recommendations go above and beyond those of Commissioner Hayne.

There has been a number of consumer outcomes to do with protecting farmers and to do with advice and superannuation. But I personally think that the real interest is in the extraordinary hypocrisy that has arisen today in the accusation of the Labor Party that the coalition are not acting on those 76 recommendations. Not only have we said that we will act on all of them, and we have been quite definitive about that, but the Labor Party are yet to come out and tell us if they will. They have said they will agree in principle with the 76 recommendations; they just haven't landed on a few of them—for instance, default superannuation. Commissioner Hayne said there should be one default superannuation fund for all participants in the industry. I can understand why the Labor Party might feel a bit uncomfortable with this, because decoupling superannuation from industrial relations is a bit of a sticking point for you guys. It goes against the entire vested interests that you have within the superannuation industry—that unholy alliance between the Labor Party, the union movement and particularly the industry superannuation funds. How are you guys going to manage to propose reforms to superannuation as recommended not just by Hayne but also by the Productivity Commission to protect consumers if you have those vested interests? You cannot. You are incapable of reforming superannuation to advantage consumers over providers because of those vested interests. It's just not possible for you. Only the coalition can reform superannuation in favour of consumers over providers.

The ultimate irony is that we have legislation right in front of us today, right now, sitting on my desk, that is addressing some of the issues that Hayne specifically mentioned. For instance, we have the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017 in front of us right now and yet we have spent so much time today wasting the chamber's time, doing almost anything else other than dealing with government business that would in fact enact some of those Hayne recommendations.

My great frustration in this is that the government have been reforming the financial services sector from the first day we were elected. The financial systems inquiry started that ball rolling and we have been systematically addressing the recommendations made by the Murray review. The Treasurer has led a very comprehensive response to the royal commission in just days. In fact, it was only two days, I think, after we had the commission's report before we released the government's response. The opposition has had that report for more than twice the time that the government has had it and yet has not come out with anything even vaguely comprehensive.

Labor don't know how to reform the financial services sector. They never have been able to because of those vested interests. The Law Council made the same point just today. The government will deal with the recommendations from Hayne in a very sensible and prudent manner and, most importantly, will put customer interests first, not unions and not industry superannuation. Labor's vested interests prevent them from ever making meaningful reforms that prioritise consumers over providers.

Restoring trust in Australia's financial system is part of the coalition's plan for a stronger economy. Australians can trust the coalition and do trust the coalition when it comes to managing the economy. They do trust the coalition when it comes to managing the economy because we don't go and beat an important sector of our economy with a baseball bat senselessly, thinking that the consequences are meaningless. (Time expired)

An opposition senator interjecting —

Did you just threaten—