I rise to speak on the Treasury Laws Amendment (ASIC Governance) Bill 2018. I start by acknowledging the commitment of the previous speaker, the member for Moreton, and I note that today we will also hear from the member for Herbert—both Queensland representatives who are firmly on the side of the consumer and customer, unlike this government, which is on the side of big banks. I think it is telling that, when you look at the speakers list today, you see that not one member of the government is getting up to defend this legislation. Perhaps they're not interested. Perhaps they're not interested in hearing the true facts regarding the impacts and how we can improve the situation and protect consumers.
The Treasury Laws Amendment (ASIC Governance) Bill 2018, as we know, concerns the governance of ASIC and the direction of the Governor-General to appoint a second deputy chairperson of ASIC. As we heard from the member for Moreton and our spokesman, Labor do support the bill. We commend the government for legislating to assist ASIC to better operate as an effective and efficient regulator. But—and it's quite a big 'but'—it has only come after years of cuts to and attacks on ASIC by this very same government. It took the teeth out of this regulator, which resulted in thousands and thousands of Australians being taken advantage of. We are only seeing this now because of the advocacy and strong representation by the Leader of the Opposition, by the shadow Treasurer and by the shadow finance minister, who called for a royal commission into banks and financial services, to protect consumers and to protect customers.
It's important as part of today's debate on the Treasury Laws Amendment (ASIC Governance) Bill to add a little more context as to where we've come from and why we're here today. I want to place on record the facts. In reading through the legislation today and reading through the statements by the minister—after taking $120 million in budget cuts from ASIC over four years, and let's acknowledge that this began in 2014—the government want somehow to be congratulated for their belated attempts to fix the mess they started four years ago. Four years ago we saw the introduction of the cuts to ASIC; we're now fast forwarding to 2018, where we've got a bill to somehow improve and strengthen the powers of ASIC.
In response to these savage cuts, the Australian Securities and Investments Commission said in its annual report released back in October 2014 that the impact of the $120 million in budget cuts would mean its ability to fulfil its role would be 'substantially reduced'. The report included estimates of reduced surveillance staff levels in 2015 for every focus area bar one. We know that these changes conveniently came at a time when the government attempted to change rules that would have allowed financial planners with six years experience to give tax advice. We know how that movie ends; it's not a happy ending.
The writing has been on the wall for some time as to what the cuts and changes would mean for ASIC, and what that means for Australians. At the beginning of 2016, Choice said:
Cuts to ASIC funding … have significantly reduced its oversight capabilities and opened the door to more unscrupulous activity in the financial services sector.
The Choice analysis found that, because of the cuts and subsequent reduced resources of ASIC, 751 fewer surveillance activities took place in just the two years since the cuts took effect in the 2014 budget. It also found a 57 per cent decrease in the number of actions against potentially misleading or deceptive promotional material. We are dealing with a new measure today, which, as I acknowledged, as part of this legislation, is a step in the right direction. But, in light of recent events, this quote from Choice's analysis perhaps sums up the government's approach to ASIC:
We rely on ASIC to monitor the likes of CBA, NAB, ANZ and Macquarie Bank and ensure consumers' interests are protected. ASIC is doing a lot with very little. However, with $120 million being ripped from the regulator over four years it's undergunned against some of the world's most powerful financial institutions.
So it makes sense that, if you as a government decide to reduce funding, reduce resources, reduce the powers and surveillance of an oversight body, there are consequences. And there have been consequences.
The government has since moved to restore only some of this funding to ASIC, after we began calling for the royal commission, of course. Even then, it was so they, I guess, could look like they were doing something and keep running a protection racket for the banks. However, the impact of those cuts on ASIC's capabilities cannot be undone so easily. These were cuts to the capability of the corporate regulator and a free pass to financial sector misconduct. The cuts are consistent, in my opinion, with the attitude that saw the government spend 601 days bitterly resisting the urgent need for a royal commission into the banking and financial services sector, as we've heard from previous speakers in today's debate. Now, let's be clear on this. Members of the government—from both the frontbench and the backbench—week after week, month after month, would talk on Sky News, talk in front of cameras and talk in front of the media, saying, 'We don't need a royal commission.' They were proud of it. They were patting themselves on the back. They were clinking champagne glasses, meeting with the top end of town and saying, 'Don't worry: we're going to hold the tide, we're going to fight them every step of the way. We're not on the consumer's side; we're on your side.' That's what the government was saying, right from the backbench up. They were going into the boardrooms of some of the most powerful institutions in the country, saying, 'It's okay. The Labor Party, the broader community, consumer action groups, the victims—no-one is going to listen to them. You've got the big talking stick and we're going to cuddle up to you and sidle up to you. We've got your back.'
What happened? Community protests happened. The stories were told of people being ripped off right across the country. We saw members of the government go a bit wobbly. Who can remember that great lion in the north, George Christensen, the member for Dawson—a little pussycat when he comes here. 'I'm going to cross the floor. I'm going to bring the government down.' Remember all of that? The member for Herbert was in there fighting for consumers and for the customers of Herbert. The member for Dawson, allegedly, in the Daily Mercury up there, was beating his big chest, saying 'I'm going to sort the banks out'. He comes down here, a little pussycat—or rather a little mouse running down here—he gets slapped over the wrist by the Treasurer, by the PM's office and by the Deputy Prime Minister—whoever it was back then—who said, 'You know what—you're not going to cross the floor.' Then he lied to the media or misled the media.
The DEPUTY SPEAKER ( Mr Howarth ): Order! You have to be careful with reflecting on members. Make sure you use their correct titles. The last word you used should be withdrawn.
Mr DICK: I withdraw.
An honourable member interjecting—
Mr DICK: I know the member for Mackellar is very—we know who you are. So do the banks. We know that when it came to action, consumers and customers could not be relied upon. On that particular note, I want to put something on record regarding this piece of legislation today and the further influence and strengthening of powers that it will give to ASIC in terms of its governance structure. When the rubber hit the road a matter of weeks ago, and we saw the first tranche of victims coming forward to the royal commission and telling their very powerful stories about how the banks had treated some customers, the Minister for Revenue and Financial Services appeared on ABC's Insiders. In describing the minister's refusal to come clean, media reports at the time described it as a disastrous interview. We've all seen it on our social media feeds, with the minister refusing to give a straight answer to a very simple question: was the government wrong to stall on calling a royal commission into the banks, given the appalling evidence that we had heard just that week from consumers and customers? We note that in the media reports in the article on five occasions the minister failed to answer questions about her past opposition to this inquiry. That totalled 10 unanswered questions on the government's delay on implementing a royal commission, even though in July last year the minister responsible was quoted as saying there would be 'no benefit to customers'. This is the person in charge of financial services in this country, who proudly said a year ago that we didn't need a royal commission because it would be of no benefit to consumers. Talking about withdrawal and apologies, I think it's about time that the minister came into this place and apologised to the consumers and customers for not listening and not caring about them.
We know there can be no doubt whatsoever that this government was wrong to delay the royal commission into the banks as long as it did, and in doing so—let's be clear—allowing Australians to be ripped off. It may not be enough to fix the problems of the past, but it's a start. Having a second deputy chairperson will support ASIC in engaging with its stakeholders to better communicate its role, its priorities, and how its resources are allocated. It will provide greater flexibility for the commission to determine how it undertakes its oversight and other governance functions. But given the shocking evidence presented to the royal commission so far, it's clear we need strong and effective regulators.
In recent times, ASIC's role has been expanding. ASIC has new direction powers to strengthen its oversight of the new one-stop shop dispute resolution body, the Australian Financial Complaints Authority. I want to note that the government has also proposed that ASIC be responsible for the management of expected additional disclosures following reforms to whistleblower laws. And ASIC may soon also have new responsibilities for administering the new Asia Region Funds Passport regime.
As Australia's corporate markets, financial services and consumer credit regulator, we need ASIC to operate as effectively and as efficiently as possible. That's why, today, Labor will be supporting this bill. This is more than can be said for the member for Warringah, who, instead, has called for everyone employed at ASIC to get the sack. That's right: the member for Warringah, after hearing about the startling revelations and misconduct of the banks, took aim not at those who'd committed the horrid acts but instead at the regulator, who the member for Warringah, when he was Prime Minister, gutted to the tune of $120 million. Speaking on the matter, the member for Warringah said:
… all the existing regulators should be sacked and people who are much more vigilant and much less complacent go in their place.
This level of hypocrisy within the Abbott-Turnbull government is astounding but not surprising. This is the same member, who, as I said, slashed $120 million from ASIC's funding over four years when he was Prime Minister, when he was the then leader of the government, in 2014.
Those opposite have a long record of turning a blind eye to what is going on with financial misconduct in the financial sector. We should never ever forget the coalition's opposition to the previous Labor government's Future of Financial Advice, or FoFA, laws and their attempts when in government to reverse them. The FoFA reforms gave ASIC important new powers to rein in poor financial advice. In opposition, the coalition voted against FoFA in the House and voted against FoFA in the Senate. When they got into government, the coalition tried to gut FoFA by legislation and then regulation. I'm proud to be part of a party that fought tooth and nail to stop this, and it was lucky that Labor prevailed in the Senate in stopping this from happening.
We know that when it comes to the protection of consumers, the rights of consumers, there is one side of politics that will always call out misconduct, that will always call out people being ripped off, and that is the Australian Labor Party. We are the party that has fought tooth and nail to deliver a royal commission, standing shoulder to shoulder with consumers and customers in this country. It took this government months, if not years, to deliver a royal commission. Now we need justice for everyone in Australia.
