Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

My question is to the Minister representing the Treasurer, Senator Wong. Some notice has been given of the topic of this question. Why did the Gillard government appoint Mr Medcraft as chair of ASIC without first advertising the position, in clear breach of the government's own guidelines for merit and transparency in senior Public Service appointments and announced with much fanfare by the then Special Minister of State, Senator Faulkner, back in February 2008?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the senator for the question and also for the courtesy of giving me some notice of the general subject matter he wanted to traverse. Again we have an assertion in a question which is not correct. I do need to point that out, because I do not think it is reasonable in question time for the opposition to put questions to the government and to ministers which are not correct. The assertion was made that this is a clear breach of the guidelines.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Did you advertise the position?

John Hogg (President) Share this | Link to this | Hansard source

Order! You will get a chance to ask a supplementary question. The minister is answering the question.

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

The guidelines, at 2.6.6, set out the exemptions from the process, the circumstances which do not require a full selection process. Some circumstances may arise, and I do not propose to read them all—I assume the senator is aware of them. There is a process flagged in those guidelines whereby the minister is required to request the Prime Minister's approval to fill a position without conducting a full selection process. The Deputy Prime Minister and Treasurer sought and received an exemption from this process from the Prime Minister, and the circumstances of the exemption have been outlined by the Treasury in the response that has previously been given. The senator is shaking his head. I was advised that the Treasury indication on this was made public, but if that is not the case I will certainly come back to you.

My point is this: an exemption was sought, an exemption was granted and Mr Medcraft was appointed chairman of ASIC for a term of five years commencing on 13 May 2011. I think that deals with the senator's question.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Why was an exemption sought, why was an exemption granted and why was the position not advertised? Was any other candidate considered for appointment as chair of ASIC other than Mr Medcraft? If not, why not?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I have just found some additional notes. Treasury did make these matters public by way of response on 12 November 2011. I am advised that Treasury undertook a review of all possible candidates, including market soundings, and advised that Mr Medcraft was the preferred candidate for the position. Treasury advised that, since Mr Medcraft was highly qualified, it was preferable not to advertise the position, to minimise disruption at ASIC and to facilitate a seamless changeover. I am advised Treasury has already said on the record:

On the basis of Mr Medcraft's considerable experience in financial markets and as a Commissioner of ASIC with responsibility for financial services, Treasury recommended to the government Mr Medcraft's appointment as Chairman of ASIC. Treasury considered a range of potential candidates for the position and concluded that Mr Medcraft was the most qualified person. On the basis ...

I can provide more in the next answer.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Prior to Mr Medcraft's appointment as chair of ASIC, what investigations or due diligence, if any, did the government conduct into his role on Wall Street with the French bank Societe Generale and the contribution of its securities products to the global financial crisis?

Penny Wong (SA, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I might finish the last paragraph of the quote I was reading out:

On the basis that Mr Medcraft was the most qualified person for the position, Treasury advised the government, in accordance with the relevant guidelines, against advertising the position.

In relation to the question that I have just been asked, that also has been provided by Treasury publicly. Treasury has said:

Mr Medcraft also disclosed to Treasury the existence of civil proceedings from 2004 in the United States brought against Societe Generale and several other respondents. Treasury advised Mr Medcraft that, given the proceedings had been withdrawn in full, it was not necessary to disclose the matter to the government.

I think that was provided in public in response to some public questions by the press on 12 November 2011.