Push for Greg Medcraft to retain ASIC post
The Australian March 29, 2016 12:00am
Leo Shanahan, Brendan Nicholson
At last week’s annual ASIC conference, the persistent murmurs remained: would this be Greg Medcraft’s last as chairman of the corporate watchdog?
Despite a previously held view that Mr Medcraft would be gone come May, there now ¬appears to be a renewed push to have the former Wall Street banker remain in the role for ¬another two years.
The Australian understands Mr Medcraft does not want to stay in the role for a full three-year term and has expressed a preference for two years, which has the support of his colleagues.
A cabinet decision on the ASIC boss is due to be made by May 5 based on advice from ¬Assistant Treasurer Kelly O’Dwyer to Treasurer Scott Morrison.
There is now only silence ¬emanating from the government on the decision, which the ASIC hierarchy is interpreting as a good sign for Mr Medcraft.
The Turnbull government recommended last week that Australian Competition and Consumer Commission chairman Rod Sims be reappointed for another term.
Even so, Labor treasury spokesman Chris Bowen told The Australian the reappointment so close to the election caretaker period was highly -inappropriate.
He said Labor should be consulted on any key appointments.
Mr Bowen has written to Mr Morrison outlining Labor’s concerns and seeking formal consultation on all appointments or reappointments for Treasury portfolio agencies. He said Prime Minister Malcolm Turnbull had outlined an election strategy for a double dissolution election on July 2, so it would have been more appropriate for Mr Morrison to appoint Mr Sims on an acting basis and allow the substantive appointment to be made in a process that involves the ¬incoming treasurer, Mr Bowen said.
Mr Morrison said the Coali¬tion was getting on with the job of government.
“No election had been called, nor is one formally due until later in the year,” he said.
“The issue of a double dissolution election is contingent on matters in the Senate that have not yet been determined. Labor should not be prejudging these outcomes, and the government certainly is not.
“As a result, the government will continue to follow the normal procedures for determining appointments and will not be ¬distracted by attention seeking by the Shadow Treasurer.”
Mr Morrison said there was a requirement for the government to consult with the states and ¬territories to enable Mr Sims to be reappointed to the ACCC at the end of his term.
“The government has sensibly initiated this process to ensure continuity in this key position upon the completion of Mr Sims’s term,” he said.
“If Labor is opposed to Mr Sims’s appointment because of his support for the government’s decision to strengthen the ¬misuse of market power rules, which they oppose, they should just say so.”
A two-year extension for Mr Medcraft would give the Labor appointee a chance to see through major reforms and ¬prosecutions begun under his stewardship but only now coming to fruition.
These include ASIC’s new user pays model, a push for harsher sentencing of white collar criminals and the investigation into Australian banks’ manipulation of the BBSW.
The BBSW investigation in particular, which recently ¬resulted in federal court allegations of market manipulation and unconscionable conduct against ANZ, with others likely to follow, is a case Mr Medcraft is keen to pursue. He led the recent negotiations with ANZ amid great personal stress, having flown back from his son’s hospital bedside in Texas where he had been the victim of a hit-and-run accident.
To remove a commissioner who wants to serve another two years in the midst of what is one of the biggest investigations ASIC has undertaken could send the wrong message — namely, that Mr Medcraft is being ¬removed for doing his job of pursuing the banks too well.
Working against this is the fact Mr Medcraft made a failed attempt to land a job at British regulatory body, the Financial Services Authority.
A sign the government could want Mr Medcraft out was the appointment of headhunters Heidrick & Struggles to initiate a search for his replacement.
Mr Medcraft’s ASIC sup¬porters point out this could just as ¬easily be the consequence of due process.
A few names on a supposed list have been reported and were being ¬floated as of last week.
All are women, which could show a desire to appoint the first ASIC chairwoman.
Productivity Commissioner Karen Chester, who is married to one-time ASIC commissioner and former Finance Department chief Peter Boxall, is believed to be under consideration. Ms Chester and Mr Boxall are understood to be close to Ms O’Dwyer.
Another name being bandied about is that of former Association of Superfunds boss Pauline Vamos, though that would seem a particularly strange appointment given ASIC’s present focus on banks and her perceived closeness to the labour movement.
Serving ASIC commissioner Cathie Armour is the favourite among internal candidates.
She has a strong track record with Macquarie and has led the BBSW investigation, but working against her is an overly cautious legalistic tone that results in poor media performances, and she may be better suited to the job in two years’ time.