Q&A recap: Simplest question on banking royal commission leads panel to clash
It was the simplest question of the evening, but the one the Q&A panel grappled with the most.
Entering the debate via Skype, questioner Stratos Pavlis wanted the politicians’ view on the Kenneth Hayne chaired banking royal commission which had uncovered shocking behaviour in the financial services industry.
The findings of the royal commission, delivered last week, have led to the resignation of NAB’s chief executive and chairman. But none of the big banks have come out smelling of roses.
“The banking royal commission seemed to have uncovered quite a lot of alleged criminal activity, many of which were confessed to,” asked Mr Pavlis.
“My question’s simple — why are there no arrests?”
Panellist and shareholder activist Stephen Mayne said there was one clear sign the banks weren’t worried by the commission’s findings.
“The banks’ share prices rose by 5.5 per cent or $20 billion the day after (the findings were handed down) and that was a shocking indictment. Basically it was the market saying, and the shareholders saying, ‘we dodged a bullet and this was much softer than we were expecting.’”
He acknowledged some heads had rolled, including at insurance giant AMP many months ago, but the police are still some way off from pressing any charges following the report’s release.
Mr Hayne has recommended 24 cases of misconduct be referred to financial regulators which could lead to civil or criminal action.
“There’s been voluntary changes but no-one’s been charged. The 24 referrals are going to need to be tough. ASIC (the Australian Securities and Investments Commission) will have to stop slapping people on the wrist and do a few criminal prosecutions,” said Mr Mayne.
‘PROSECUTE MORE, DO DEALS LESS’
Shadow Attorney-General Mark Dreyfus said it was too early for prosecutions: “Ken Hayne could not have recommended that someone was guilty. He can only recommend that there be investigation for prosecution of the 24 cases that he’s referred.
“Some of them are very serious. So watch this space to see what happens with those 24 referrals.
He said ASIC had to adopt a different attitude.
“Prosecute more, do deals less, not let people off by a promise of better behaviour in the future but (instead) enforce the law and prosecute.
“If Labor are elected will be doing everything possible to make sure that there is that change of culture in the regulators so that we see more prosecutions.”
Representing the Government, Liberal Member for Corangamite Sarah Henderson said ASIC should, in the future, be “feared”. But it wasn’t right now.
“Australians have been let down by our banks and by our regulators.
“We have a range of legislation in the parliament which reflects some of the recommendations made by the commission, including increasing criminal penalties from something like $200,000 to $9.45 million which Labor is opposing.”
The dig was too much for Mr Mayne who despaired at the party political point scoring.
“Just find stuff you can agree on and get a couple of them done,” he said to both Ms Henderson and Mr Dreyfus.
‘PEOPLE TRY SUICIDE TO GET OFF THE ISLAND’
The panel clashed over a bill being brought forth by independent MP for Wentworth Kerryn Phelps. This would see unwell refugees in offshore detention centres on Nauru and Manus Island transferred to Australia for treatment on the say so of doctors.
Ms Henderson said it could provide an incentive for people smugglers to try and bring people to Australia.
But Ellie Shakiba, a refugee in offshore detention waiting to be resettled in the United States, told the MP few would be encouraged at the prospect of being stuck on an island for years.
“Nobody wants to come to Australia by boat. There is the danger on the ocean and once you arrive in Australia you are detained on Nauru for five and six years and (refuges) reach the point to try to suicide to get out of this island.
“I don’t think anyone would want to do this.”
‘ANOTHER BIG SCARE CAMPAIGN’
As CEO of the Australian Shareholders’ Association, Mr Mayne gave a passionate defence of franking credits which Labor is attempting to frame as a loophole whereby relatively well-off people who pay no tax are getting cash rebates from the government.
Rather, My Maybe said, franking credits effectively stopped shareholders being taxed twice.
Nevertheless, he suggested a compromise whereby the rebate could be capped at $10,000 or $15,000 a year.
He warned that if Labor didn’t do something about the issue, they would be effectively gifting votes to the Government.
“Put the red flag up and compromise before you give the Liberals another big scare campaign. They’re going to run border security and franking credits and you can close down franking credits tomorrow with a sensible compromise.”
Mr Dreyfus didn’t accept that votes would slough away to the Coalition and said Labor would have a whole range of policies come the election that would be “dedicated to fairness”.
“This is a loophole. It’s costing the Commonwealth, in other taxpayers’ funds, to the tune of about $8 billion a year, going out as cash payments to people that have paid no tax. The franking credits system was not designed for this purpose,” said Mr Dreyfus.
“I accept that’s a change and accept it’s going to disrupt some people’s arrangements.
“But I’m not going to take Stephen Mayne’s advice. We are pressing on with this policy”.
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Originally published as Simplest question fires up Q&A panel