Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators (2019 Measures)) Bill 2019

05 February 2020

Mr STEPHEN JONES (Whitlam) (12:26): I am pleased to be speaking on this important piece of legislation, another one of the royal commission implementation bills. I'll interrupt myself and say the bill goes by the name of the Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators (2019 Measures)) Bill 2019. It could equally go by the title: 'The Hayne royal commission has given us a boot in the backside for sitting on a report that we have been sitting on for well over two years and have done nothing on. We voted against a royal commission 27 times, and were dragged to the mark, and, by God, we better be seen to be doing something about this bill in 2020'. That would be a more accurate title for this bill.

With that said, we welcome the fact that, after sitting on a report that they themselves commissioned back in 2016, a report to government about what they needed to do to strengthen the powers of the enforcement regulators, of the corporate regulators, they've finally done something. They wanted to be seen to be doing something when they actually weren't. After commissioning the report, and then sitting on it since 18 December 2017, and with all the speed and agility of a wounded wombat, they have brought this bill into the House today and they expect a pat on the back. We will support the bill, but we're not going to issue them with a pat on the back. We will support the bill but there'll be no pats on the back.

The bill provides ASIC with some new powers to help them combat corporate crime and bad behaviours by banks—powers that they've needed for a long time. Schedule 1 and 2 of the bill extend ASIC's powers to search and receive evidence, providing them with new capabilities that will help prosecute serious offences. Schedules 3 and 4 of the bill enhance ASIC's licensing and banning powers, giving the corporate regulator a greater ability to stop bad actors before they go too far—sensible stuff.

Labor support the enhancement to ASIC's powers and we will support the bill. But, as I've said in my introductory comments, we do ask why it's taken the government so damn long to get here. Why has it taken them so damn long to get here when the ASIC Enforcement Review Taskforce handed down its findings more than two years ago and the government then sat on those findings? Schedule 1 of the bill actually harmonises and aligns ASIC's various search warrant powers with those contained within the Crimes Act, removing the current requirement for ASIC to forewarn those under investigation. That's important. If we're going after these crooks we don't want to put them on notice and give them the opportunity to avoid detection. We don't want to be providing corporate wrongdoers with the opportunity to destroy or conceal evidence of misconduct. ASIC is responsible for investigating serious indictable offences involving corporate criminal misconduct, those that carry a prison sentence of 12 months or more. In cases like this, ASIC should have the powers of any law enforcement body charged with investigating serious crimes. The government has our full support.

Schedule 2 of the bill also amends the law to allow ASIC to access and receive telecommunications and intercept material to investigate and prosecute serious offences, bringing them into line with other agencies responsible for investigating serious offences. In fact, it might surprise many that they don't already have the ability to receive this information. They don't, but they should have. The chief officer of an interception agency will be able to provide an ASIC member or staff member with information about an interception warrant or lawfully intercepted information—that is, they are able to pass on that information. It makes sense and should be supported by all members of this House. This will apply where the information relates to matters involving a serious offence or the likely commission of a serious offence. These are serious powers only because—I'm sorry, that is Siri on my phone! Who said Siri's not listening!

Schedule 3 of the bill—now that I've switched off the interception powers of Silicon Valley—strengthens ASIC's licensing power. This will also help ASIC ensure that credit and financial service licensees and the people who control them are fit and proper to be carrying on financial services businesses. Ensuring that controllers such as significant shareholders are fit and proper is essential in deciding whether a license should be granted or retained. Too often we saw that in evidence before the royal commission, and I dare warrant members of this place have had representations from constituents who have been victims of poor financial advice. I myself, in my first term in office, received representation after representation from victims of the collapse of Trio Capital. They had been sold investments into these by financial advisers who were subsequently disbarred. The enforcements actions of ASIC should have kicked in a lot earlier. We want to make it a sufficient bar. It is described within the industry as a nuclear option but it is an option that should be available to ensure that we aren't creating more victims, as many members of this place will attest to.

Schedule 4 of the bill expands ASIC's power to ban people from the financial services industry. They're important reforms. As Commissioner Hayne has shown, there are too many shonks and shady operators that have been allowed to swim in the sea of finance. It is consumers and investors who are the victims. The schedule 4 reforms will give ASIC a much broader range of grounds to make a banning order against such a person. Importantly, that will include noncompliance with financial service laws—and so it should—and the management or oversight of the conduct of a financial services or credit business.

In the course of my contributions I was unusually interjected on by my phone, the voice of Siri shouting, 'I'm on it.' If only it were so easy to get reform in this place as to bark to your mobile phone—that would be a good thing. The reforms recommended by the ASIC review handed to government two years ago would have already been implemented. And there were the recommendations—the giddy-up—given by the Hayne royal commission, instructing the government that it really ought to have implemented the recommendations of that review over 12 months ago. It behoves the government and all upright thinking members of this place to act in the interests of their constituents, of the consumers of financial advice and of all of us who rely on having a financial services sector staffed by professionals and overseen by regulators who are ready to ensure that wrongdoers are brought to justice. With those brief and precise comments, I commend the bill to the House and I move the amendment circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes that the Government:

(1) has taken more than two years to implement the recommendations of the ASIC Enforcement Review Taskforce; and

(2) chose in December 2019 to prioritise failed anti-union bills instead of legislation to implement the recommendations of the Royal Commission".