Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

My question is to Senator Coonan, the Minister representing the Minister for Revenue and Assistant Treasurer. I refer the minister to the Westpoint scandal in which 4,000 Australians lost $300 million worth of savings. I also refer the minister to the $50,000 promissory note loophole that the regulator, ASIC, says prevented it from taking earlier action in the Westpoint matter. Didn’t the minister on a number of occasions in answers to questions in this place on 22 June emphatically state:

... there is no loophole.

Is the minister aware that the chair of ASIC, Mr Lucy, again called on the government to close the loophole on 27 June, a mere five days after the minister denied there was any problem? Didn’t Mr Lucy say that the loophole could be closed very simply when he said, ‘One way of addressing it would be to go from $50,000 to $500,000’? Can the minister tell the chamber who is right: Mr Lucy and the regulator or the minister?

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

Thank you to Senator Wong for the question. I can give Senator Wong the answer that I have in my brief because I am certainly not the Minister for Revenue. I can tell her that ASIC has been helping people deal with Westpoint on a number of fronts and is working to ensure people receive the full protection of the law. Firstly, ASIC has been actively warning the public about the risks of high-yield investments since 2003, and it did so again in 2004 and 2005. Secondly, it approached Westpoint directly in 2003 and 2004 on their approach to both fundraising and disclosure. After these discussions failed, it ran a test case through the courts to clarify whether Westpoint had breached the requirements of the Corporations Act and whether investors were misled. A decision from the appeal process launched by ASIC has been handed down and it does confirm that the Westpoint schemes are subject to the investor protection provisions of the law. Thirdly, ASIC has acted to wind up the Westpoint companies and to appoint receivers to the personal assets of the company directors for the benefit of creditors.

ASIC is now doing its utmost to assist investors in recovering their losses. It has established a Westpoint page on its website to help investors understand what options they have and to take recovery action.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

Mr President, I rise on a point of order going to relevance. The minister is reading a brief about ASIC’s actions. The question was very specific about whether the minister stands by her comments that there is no loophole. I would ask you to draw her back to the question.

Paul Calvert (President) Share this | Link to this | Hansard source

The minister has 2½ minutes left to complete her answer. I remind her of the question.

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

ASIC is doing its utmost to assist investors in recovering their losses. ASIC is keeping licensed planners who promoted the Westpoint investments under close observation. It has announced that it will require them to report on a monthly basis about how they are dealing with client complaints and losses. The purpose of that, of course, as Senator Wong would appreciate, is to ensure that investor complaints and compensation claims are dealt with both quickly and fairly. ASIC is taking action to trace and secure as many assets as possible for distribution to the Westpoint investors. There are certainly indications that some Westpoint directors entered into transactions in the lead-up to insolvency, which may be voidable and may allow funds to be claimed back for distribution to creditors. ASIC is currently questioning group founder, Norman Carey, in court about his personal wealth, after Mr Carey claimed to possess only minimal assets.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I rise on a point of order going to relevance. The minister admitted that she was going to read a brief that has nothing to do with the question asked. She is pressing on. She reads beautifully—I will concede that—but she is making no attempt at answering the question, which goes directly to her answers made in this place at the end of June. They have been contradicted by other people. She has been asked specifically about that and she refuses to even attempt to bring any answer to that question. We are not here to hear ministers read briefs that are of no relevance to the question.

Paul Calvert (President) Share this | Link to this | Hansard source

I hear your point of order but, as I said earlier, the minister has over a minute left to complete her answer, and I would remind her of the question.

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

Thank you, Mr President. I am very much enjoying dealing with Senator Wong’s question and outlining in great detail ASIC’s actions in relation to the Westpoint matter, which is a serious matter for investors. The information that I have been giving in this answer is very relevant, I would have thought, to those investors out there who are anxious to understand what options they may have. They can have some comfort and confidence in the fact that ASIC as the regulator is on the case and very much doing what is necessary to ensure that investors have that level of comfort and understand what options they have to recover their investment.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I again ask the question: does the minister stand by her view put to this chamber on 22 June that ‘there is no loophole’, contrary to the advice from the regulator? Is that the answer that the minister gives to the thousands of elderly Australians who lost their life savings in Westpoint? Doesn’t this just demonstrate how arrogant and out of touch this Howard government is—that you do not even acknowledge that there is a loophole?

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

I am not quite sure whether that is a statement from Senator Wong or a question. But ASIC, for example, has announced that it will require reporting on a monthly basis on how clients’ complaints are dealt with by financial advisers and, if serious breaches of the law are found to have occurred, ASIC certainly has the power to impose penalties. If there is any additional information that the minister wishes to add to my answer, I will draw it to his attention.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

Mr President, I ask that further questions be placed on the Notice Paper.