26 October 2020


SUBJECTS: ASIC payments scandal; James Shipton; Banking Royal Commission; Newstart. 

TOM CONNELL, HOST: Let's return to the story on the resignation of ASIC Deputy chair, Daniel Crennan. Joining me live now is Shadow Assistant Treasurer Stephen Jones. Interesting this story that we've had Daniel Crennan believed he didn't do anything wrong and indeed the payment for his rent was within normal policy. He was asked to move from Melbourne to Sydney, therefore is incurring an extra cost. What do you make of that?

STEPHEN JONES MP, SHADOW ASSISTANT TREASURER: Clearly we've got a hot mess inside ASIC. We can't have the regulator, which is supposed to be the cop on the beat going after banking and corporate misbehaviour, with problems in its own backyard. I think after Friday it was inevitable that we're going to see some resignations. I think the Treasurer has also got some questions to answer to be frank. On Friday he said that this came as a big surprise to him, whereas over the weekend and today it's been revealed that he's known for at least a month and frankly, he's mislead people about what he has known. Obviously embarrassing for the Government, I mean James Shipton was their hand-picked bloke. They picked him to come in and reform ASIC, to be the tough cop on the beat against the banks to try and stave off a Royal Commission and it's all gone pear-shaped. Frankly, we don't need the Government to be using this as an excuse to delay implementing those critical Royal Commission implementation recommendations. We've got to get the mess in ASIC fixed and then get back to implementing the Banking Royal Commission recommendations.

CONNELL: So what about James Shipton, do you feel you have confidence in him continuing in the role?

JONES: Look, I went back over the weekend and looked at some of the things that Mr Shipton himself said before the Royal Commission, where he said if the regulator is expecting standards of corporations and banks and those within the industry, than those same standards of got to be expected of the regulator. I think it's for Mr Shipton to explain the anomalies between those two statements. It clearly it put him in a very difficult position.

CONNEL: So what if he can't explain that, in your view should he go?

JONES: Well, I think it puts him in an incredibly difficult position. It's for Mr Shipton to explain the anomaly between what he said before the Royal Commission a year and a half ago or what's been exposed over the last week and a half. It's also up to the Government to explain why it has sat on this for over a month. I mean, this was their hand-picked guy. This is the guy that Scott Morrison himself picked to head ASIC to be the top cop on the beat. Clearly the cop has got some questions of his own to answer.

CONNELL: Just wanted to get your thoughts as well, I know you’ve been talking about responsible lending and not the biggest fan of the Government's proposed changes in this area. Is there some sort of an issue though? I mean, there's the famous wagyu and red wine case where so thorough and exacting the standards become that banks were starting to be asked, and this case obviously push back against that but, you know itemised someone spending whereas if they had a one-off meal or they happen to eat out a bit, but they had to assume that that person could never exist without expensive nights out for dinner, or be it in reality when I someone buys a house, they change their spending habits. I mean, is that an issue here? Do you agree with the issue?

JONES: Back to first principles, we want households and businesses to be able to get access to credit but we want to ensure that all that mis-selling and that egregious behaviour the brought on the global financial crisis, that was exposed in the Royal Commission, doesn't spark up again if we relax our lending standards. And what we saw was commission driven sales processes, people flogging loans to people who couldn't afford them without any regard to whether they were suitable and affordable for the poor punters. I think we need to ensure that we have regulation in place which imposes standards upon banks to stop that sort of egregious behaviour happening. I think the law is right. Clearly, there was some uncertainty in the law. I welcome the fact that Westpac won the case against ASIC later on last year. I think the court got it right in the Westpac case, which means the law is working properly now. We need to ensure rather than changing the law, we're implementing it properly and responsibly and we’ve got a cop on the beat that's able to do that and there's some question marks over that today.

CONNELL: I just want to ask you finally about Newstart. There’s a few Coalition MPs talking about where this might look, the Government having a decision in December. Is Labor just going to say increase it without putting a number on it and just wait until December, or do you go and figure out a number? It's within capabilities, surely, on what a so-called, you know living amount should be and try to put pressure on the Government that way.

JONES: Yeah, well, we know the right amount is not $40 a day. Almost everybody, except the Treasurer and the Prime Minister, agree with that. The right number, we will look at what the data that comes forward over the next couple of weeks shows but I think the Government's got all of that information available to them. They should be more transparent on the information that they have, including the actual unemployment numbers, the number of people receiving unemployment benefits and the costs of these changes. But what we do know, we do know that we can't bump people back to $40 a day. And we do know that every dollar that's in the wallet of a person on a low income or no income is going to find its way back into the economy, back into the shop till. So it's actually good economics. 

CONNELL: What data do you need that will then allow you to make a decision on what that amount should be?

JONES: Well, we’ve got to look at the costings of all of these things Tom. We’ve got to look at what it's going to cost the budget bottom line at the end of the day, but also, you know, what is fair and reasonable for a person who's going to be unemployed. What's clear is that this argument the Government was using a few months ago that people are only unemployment benefits for a short period of time, doesn't stack up anymore. Clearly, people are going to be unemployed for longer and we got to ensure that the support is right. So we need to look at all of these things Tom. We're not in government, they are and it's up for them to explain their decisions on this. They should have of course used the opportunity in the budget. It seems bizarre to us that halfway through a budget year, they're going to make announcement about something that really should have been announced in the October budget.

CONNELL: Stephen Jones appreciate your time today. Thank you.

JONES: Good to be with you.