Slade Brockman (WA, Liberal Party) Share this | Link to this | Hansard source

I present the report of the Economics Legislation Committee on the Banking Amendment (Deposits) Bill 2020 together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

By leave—I wish to make a few points. This is a private senator's bill from Pauline Hanson's One Nation Party. Senator Roberts is the initiator of this bill. I want to make a couple of quick remarks on the report and some clarifications that need to be made. This is to do with the so-called 'bail in' possibility of banking institutions bailing in depositors that has gained some traction in the community. I rise this afternoon really to make one key point: that there is, and the report makes clear that there is, no ambiguity in need of rectification by this private senator's bill. It is not possible under current law and regulation for APRA to require banks to bail in deposit accounts. The Reserve Bank, APRA and Treasury all agree that the Banking Act does not imply that losses could be imposed on deposit holders or give APRA any additional powers that could be used to the detriment of retail depositors.

Depositors are already safeguarded under a range of protections such as the Financial Claims Scheme, which the Treasurer may activate in the event that a bank fails. Upon activation, APRA provides depositors with access to their deposits within seven days, up to a $250,000 cap. This covers around 99 per cent of deposit accounts in full, and around 80 per cent of household deposits by value. There is a depositors' preference system which applies to deposits above the FCS cap and means that, in the event a bank fails, the claims of depositors rank above all equity holders and creditors. There are numerous layers of prudential regulation and interventions APRA can make to resolve financial institutions in distress, such as recapitalisation, statutory management and the transfer of powers.

Much of this comes down to the question of the phrase in the relevant laws, 'any other instrument'—

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Order, Senator Brockman. A point of order, Senator Urquhart?

Anne Urquhart (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

This bill is pursuant to the selection of bills. I understand that leave was given, but normally we don't debate bills that are pursuant to the selection of bills, so we would withdraw our support for leave.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

In that case, Senator Brockman, you no longer have the call. We will return to government business orders of the day.