Clik here to view.
Understandable community anger is a threat to us all
The Australian 8:09am August 9, 2018
Robert Gottliebsen
We looking at entering a new an era of crime and punishment in Australia as the community loses trust in its politicians and corporate executives. Suddenly the possibility that the actions of politicians and corporate executives could be classed as “criminal” is being publicly raised. The penalty for criminal offences can be jail, although there are many other non-jail penalties.
Back in 1995 the Australian Parliament passed legislation stating very clearly that any politician, public servant or political adviser found by the courts to be misleading the public could be jailed for one year. Yet politicians commit that offence on a regular basis in defiance of the law because votes are more important. But the law is there.
The first linking of possible criminal offences to corporate actions actually came from a politician — federal Treasurer Scott Morrison. In April, Morrison said revelations that AMP misled the corporate regulator and its own customers were “deeply disturbing”. He warned that such behaviour could be punished with a prison sentence.
But earlier, Commonwealth Bank was charged with money laundering. It escaped with a $700 million fine but there was no criminal conviction
Last month, Victoria Police announced that it was investigating whether Victorian government ministers, including the Attorney-General and police minister, had committed criminal offences by using administration money to fund the so called “ red shirts” who helped win the election. The money has been paid back by the ALP. The ministers have not resigned.
Financial services royal commissioner Kenneth Hayne this week raised the prospect that NAB’s taking of money “to which there was no entitlement” for services it never provided might be a criminal offence.
In addition Ben Butler and Michael Roddan report that National Australia Bank may face criminal charges over a probe by the corporate regulator ASIC into the company’s “suspected offending”, amid revelations the lender charged fees of more than $3 million to dead people.
I emphasise strongly that I am not suggesting that the Victorian Ministers and the executives of the AMP or NAB have committed any criminal offence.
But the possibility is now being publicly raised and thus becomes a community issue. In the US, the investment banking community committed the most hideous offences leading to the global financial crisis. There were big fines but no jailing. The investment bankers considered the fines as part of the cost of doing business and they are sliding back to their old ways.
Here in Australia, I believe that the community is losing trust in its politicians and public servants. The royal commission into financial services has discovered actions that multiplied and extended that distrust into the corporate sector — particularly the big banks plus the AMP.
As I pointed out yesterday, the decision by Commonwealth Bank to raise its dividend, albeit by a token amount, might have been loved by the share market, but showed the bank board is insensitive to what is happening in the wider community.
I believe our strong banking system has been a big contributor to our prosperity. It’s dangerous, but understandable, that the system is now under threat from ASIC’s corporate cops and the shadow of possible criminal offences and jail hanging over executives and board members.
It seems we are looking at is a breakdown in the decision-making processes of people at the top, in both government and the corporate community. In the corporate area, many parts of the community believe shareholders have been ranked too high in comparison to customers. In government, the community view is that it’s all about votes and not national wellbeing. These are serious matters
In this context it’s important to go back to 1995, where legislation was passed to promote public service and political honesty.
The parliament of the day passed the legislation in the hope that it would never be necessary to use it against ministers of the crown. In the 1995 Federal Criminal Code under Section 137.1 in Chapter 7 there is a section entitled “Good administration of government”.
In simple terms, the provision of false or misleading information or documentation when performing the duties of office as a public servant, an employee of the government or holder of public office or, even, as a private citizen testifying before a Parliamentary Oversight Committee, is a serious offence. The penalty is very clear: 12 months imprisonment.
I can’t prejudge the courts, but there appears to be no statute of limitation in the legislation. So every statement made by any politician may be available to be examined by the courts to see if it is false or misleading.
Any politicians and advisers who are charged will face the next five to 10 years defending themselves in the courts. The government of the day will decide whether they should have legal aid.
But for all its severity, the legislation has not worked, and the public was grossly mislead in energy policy by state politicians who knew their actions would put up prices and create shortages.
But the public has been equally misled over defence, the deficit and other matters. The community anger is rising and extending to corporations. The direction that community anger will take is both unpredictable and dangerous.