18 April 2018
Transcript - #2018045, 2018

Interview with Ross Greenwood, 2GB

Subject: Financial Services Royal Commission

ROSS GREENWOOD:

The Treasurer Scott Morrison is on the line. Many thanks for your time Treasurer.

TREASURER:

G'day Ross sorry I was delayed getting on.

GREENWOOD:

No problems at all, can I just go to the very heart of this I think. Were you shocked by the revelations you heard yesterday from Jack Regan in regards to the behaviour of the AMP and the number of times it sort to mislead the corporate regulator ASIC?

TREASURER:

Yes I was and deeply disturbed by it. But what I was pleased to learn was that ASIC prior to that evidence being provided had already been engaged in an investigation on these matters which continues and you know they put out a statement to that effect today. These are very serious issues, under the corporations act these offences can carry gaol sentences.

GREENWOOD:

That being the case, my question for you would really be do you believe there has been an attitude in inside some of our major financial institutions here in Australia that they could run rings around the corporate regulator, that effectively they could massage the story, try and tell the story according to what they wanted to tell and not necessarily what ASIC wanted to hear. In other words, they've effectively taken the regulator for a ride?

TREASURER:

It's very hard to form a different view based on what we've seen. One of the reasons I introduced the Banking Executive Accountability Regime was the create direct personal consequences for senior people, starting in the banks but clearly that will need to extend to other places which was always an intention but we were starting with the banks, people need to know you do this, yes there are these specific penalties, and all the rest of it but you're out of the industry, you're gone.

GREENWOOD:

The other aspect of this is given the Government did not want to have a banking royal commission, it's not got one, these revelations are coming out. You're surprised by these revelations, does that really justify the calls of many of those on the National Party side of politics, and those inside the Labor party for the Royal Commission which the Government of course argued against?

TREASURER:

As I just said, ASIC were already investigating those exact claims. So there was already an investigation underway. ASIC has actually been working quite closely with the Royal Commission, that's not surprising given where the Royal Commission has gone in their questioning. I think ASIC is also using the opportunity in this I think to further some of these matters. It bears out our decision that we thought doing this, it should be broader, it shouldn't just be the banks. It should be the insurance companies, it should be superannuation, as you know the Labor party opposed it going to superannuation. So, they wanted a political inquiry into the big banks, I've never thought it was a genuine initiative from the Labor party, they were just playing politics. But when we got to the point where we got to last year, and we decided to do this, well we did it in a way that has ensured these types of issues are being dealt with. We've got a commissioner who I think is doing an outstanding job. Very no-nonsense and he's not a show-boater, he's keeping the focus on what the focus needs to be on, which is getting the evidence in order to be able to deal with those matters and I look forward to his report, in the meantime I'm not going to wait around. ASIC is getting on with it, we're getting on with it. Our legislation is passing. We've increased the resources and powers at ASIC, we're looking to do that even further and we've got the Australian Financial Complaints Authority, the merged body coming together at the end of the year, we've got a new deputy commissioner coming into ASIC who'll be effectively a special prosecutor, so we're getting on with it.

GREENWOOD:

Ok but then given the fact that in the past, historically, it was appear as though the big institutions have not been frightened of ASIC, it appears as though they felt they could game ASIC. It also has been said a lot of times, and I would say this is my observation, that ASIC has been a reactive organisation, not a proactive organisation that has been feared by banks and big organisations here in Australia. Do you believe that you're given ASIC now the resources to be able to change that view inside the financial services industry, and inside corporations all around Australia?

TREASURER:

Not just the resources, but we've got a new chair of ASIC and he's going about I think doing some very significant changes within ASIC, and reforming ASIC internally as well. I think we've been of the view that that has been necessary. I think that will make a stronger ASIC, an ASIC that is very focused on its mission with the resources and powers it needs to get on and do that job. They're the things we've been doing. We have been getting on with it, while others were sort of talking about commissions and inquiries which are fine, a government has to just get on and do the jobs which is what we've been doing.

GREENWOOD:

OK but I'll give you one small example of this at that is let's say for example, it could be your mother, aunt, it could be your cousin, it could be your brother, it could be your kids, it could be anybody who could have been in any of these products where they were paying money but receiving nothing for that money…

TREASURER:

I think that's outrageous.

GREENWOOD:

… from our largest bank, the Commonwealth Bank.

TREASURER:

It's disgraceful. And that's why particularly in relationship to the AMP matter, ASIC have an inquiry, an investigation and they were already progressing before this investigation was even given to the Royal Commission. It would not be true to say that because of the Royal Commission ASIC were investigating that matter, that's not true…

GREENWOOD:

Without the Royal Commission though, do you believe really, that that revelation in regards to maybe the cover up, or even the attempt to make changes to a so called independent report, do you believe that would have come out?

TREASURER:

They were already investigating. One led to the other. So I welcome the fact it has come out there, but I think what we have to be conscious of is that the Royal Commission will actually bring out in the open a lot of matters which authorities were already acting on, or have acted on in the past, and all those stories will come out at the one time. So I think it will certainly raise the consciousness of it and that's fine, but the action is what matters and the actions that are needed and have been undertaken is increasing the resources for ASIC, increasing the powers for ASIC, ensuring that we have a head of ASIC who is going to take ASIC into a new era which is what we want them to do. That we have prosecutors in there who are prosecuting. And there will be a special effective prosecutor who will be starting in a couple of months now which we have gone through the appointment process for Mr Crennan. That's all happening. The Banking Executive Accountability Regime is now law. If we'd waited for the commission of inquiry to come back next year, and then perhaps do it after that, that would be two years. We've just been getting on with it.

GREENWOOD:

Scott Morrison, our Treasurer, there was no reference at all to Santa Claus there, Scott. Maybe that will be in our next interview.

TREASURER:

I heard the jingle!

GREENWOOD:

I'll play the jingle after seven o'clock tonight for you especially. That will be good. Treasurer Scott Morrison there.