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Kelly O'Dwyer dismisses Labor's calls for banking royal commission as 'political stunt'
Michael Brissenden reported this story on Wednesday, April 20, 2016 08:05:00
http://www.abc.net.au/am/content/2016/s4446560.htm
MICHAEL BRISSENDEN: The Federal Government will seek to head off calls for a royal commission into the banking sector by announcing new funding and powers for the corporate regulator, ASIC. Today's announcement is expected to include a higher levy on big banks and other corporations to help restore $120 million in funding to the regulator. That money will pay for an extra commissioner to focus exclusively on the banking sector. But that won't satisfy the Opposition leader Bill Shorten who spoke to reporters in Canberra this morning.
BILL SHORTEN: I think that for most of the time that Mr Turnbull's been Prime Minister, it's been Labor setting the national agenda. And on the royal commission into the banking and financial services industry nothing less than a royal commission will satisfy millions of Australians who want the highest possible standards from our banking sector.
MICHAEL BRISSENDEN: Opposition leader Bill Shorten there. For more on this I'm joined by the Assistant Treasurer Kelly O'Dwyer.
Kelly O'Dwyer, good morning.
KELLY O'DWYER: Good morning, Michael.
MICHAEL BRISSENDEN: So can you confirm the Government is going to hit the banks up for $120 million to beef up ASIC?
KELLY O'DWYER: Well, what we are going to be doing is we are going to be increasing industry funding, which will include significant funding from the banks for ASIC. We are going to be strengthening the powers of ASIC, particularly with regards to enhanced surveillance to make sure that our corporate watchdog will not only be a very tough cop on the beat, but will be incredibly strong at dealing with consumer issues in the financial services sector.
MICHAEL BRISSENDEN: Clearly this is an acknowledgement that it was a mistake to cut the $120 million from ASIC in the 2014 budget and also an acknowledgement that ASIC hasn't been tough enough with the banks as a result.
KELLY O'DWYER: Well, we've been going through a very methodical process here. I mean the Labor Party through the efficiency dividend when they were in government significantly cut ASIC's funding. We are going to be providing ASIC with more funding than they've ever received to ensure that it can fulfil its mandate. But to do that we have conducted two very big inquiries: One, the financial system inquiry which made some key recommendations which we are following through on very, very expeditiously at the moment. That will give increased product intervention powers to ASIC, make sure that ASIC's enforcement regime is in line with community expectations, including looking at increasing penalties and strengthening consumer protections in the e-payments code. This of course was a review that was completely and utterly rejected by the Labor Party during their time in government. They opposed it. We did it. We don't just talk; we do. And now we're responding to the ASIC capability review that has done a very comprehensive review looking at ASIC to see whether or not it has the appropriate capability and resources to do the job that we expect it to do, which is why we're strengthening its powers and strengthening its mandate.
MICHAEL BRISSENDEN: But it's hard to deny, isn't it, that Labor's push for a royal commission has sort of forced your hand on this.
KELLY O'DWYER: Well, Labor have no credibility on royal commissions. I mean we have just seen a royal commission into the construction sector which brought out very damning findings that said we need to restore the Australian Building and Construction Commission. Now Labor have ignored that, despite the fact we have more than a hundred unions officials before the courts, you know, with more than a thousand charges. They have flagrantly disregarded the very clear findings of a royal commission. It's a political stunt. They are not interested in looking at real consumer protections. We are acting; they are talking.
MICHAEL BRISSENDEN: It's also a reflection of community opinion, isn't it? Because it's pretty clear from the polling that a vast majority of Australians support the idea of a royal commission into the banking sector, a lot more I would suggest than supported an idea of a royal commission into the trade unions.
KELLY O'DWYER: Well, Australian people want us to take action. They don't want more talk. Nothing in a royal commission will provide us with any more ability to deal with the problems than the two inquiries we have already had. It won't provide anybody with additional compensation. What we are looking at and what we will be announcing today is an additional ASIC commissioner, one with experience, somebody who has experience in prosecuting financial crimes. We will be adding a commissioner so that we are increasing the resources of ASIC. We are looking at how consumer complaints are being handled by the Superannuation Complaints Tribunal, the Financial Ombudsman, the Credit and Investment Ombudsman, and we're looking at whether or not we can create a one-stop-shop for consumers to make sure that we can deal with their complaints quickly.
MICHAEL BRISSENDEN: And you'll be getting the extra money for this from the banks themselves. What's to stop the banks, and one would assume this is exactly what they'll do, is pass this on in higher fees and charges for consumers?
KELLY O'DWYER: Well look, we will make sure that those people who utilise the benefit of the regulator will actually be paying for the regulator. That's as it should be. The banks need to bear more of the burden in this regard and we have spoken with them over a number of months. I mean there is nothing new in this. We have been talking about industry funding for a period of time. We have been working on getting the model right. And today we are announcing that we're proceeding with the model.
MICHAEL BRISSENDEN: Okay. Reports this morning also around in the Fairfax newspapers that the Government will be going harder than Labor on cracking down on high income super tax concessions. Labor, as we know, wants to reduce the threshold from $300,000 to $250,000. Reports this morning suggest the Government will take it as low as $180,000. Is that right?
KELLY O'DWYER: Well obviously Michael I'm not going to speculate on what may or may not be in the budget. The budget will be handed…
MICHAEL BRISSENDEN: Okay, but you have suggested in the past that superannuation is somewhere you're looking.
KELLY O'DWYER: Well, the budget's going to be handed down on the May 3. What we have said is that we acknowledge that superannuation concessions need to be fit for purpose. We need to be aligned on what the key objectives are for the superannuation system. I'm having discussions on a bipartisan basis with the major political parties to see if we can come to a resolution on this very important point. It was a key recommendation of the Murray Financial System inquiry. And in terms of other announcements about reforms in the superannuation sector, well obviously that will be announced in the budget.
MICHAEL BRISSENDEN: Okay, Kelly O'Dwyer, we'll leave it there. Thanks very much for joining us.
KELLY O'DWYER: Thanks very much, Michael.
MICHAEL BRISSENDEN: Assistant Treasurer Kelly O'Dwyer.