30 November 2017
Transcript - #2017230, 2017

Interview with Gareth Parker, 6PR

SUBJECTS: Royal Commission – Banks and Financial services; Bill Shorten’s failure to expel Sam Dastyari from the Labor party; Sam Dastyari’s failure to resign from the Parliament

GARETH PARKER:

Treasurer, good morning.

TREASURER:

G’day Gareth.

PARKER:

Why the backflip?

TREASURER:

Well, I don’t agree with the characterisation for this reason - on this issue we have always acted in the national economic interest and until this week, events of this week meant that the damage that was being done to the credibility of the banking and financial system because of the politics and political game playing and recklessness had reached a tipping point. As a result it was no longer in the national economic interest to not take control of this issue and take the actions that we have. Now, we said today it was a regrettable necessary. Regrettable because if we had done this several years ago then we wouldn’t have been able to do all the things we actually have done to improve accountability and strength in the banking system and fairness and competition. So we have gotten on with all of that. But now the events of recent days, of the last week, and the recklessness of politics means it would only mean further damage. This was backed up in the discussions I had with the Reserve Bank Chairman, with the Chairman of the Australian Prudential Regulation Authority and you would also be aware that the banks themselves said that this issue had reached a point where it was really harming the credibility of the banking system on which every person’s job in this country depends.

PARKER:

But for the best part of the past two years the Prime Minister, and you and other senior members of your government has been saying that this is not necessary, that we do not need a banking inquiry that it wouldn’t do any good, that it would be a waste of money. It is very difficult to avoid the conclusion that it looks as though the Government is being led around by the nose by the Labor party, by the Greens and increasingly by your Nationals colleagues who have been pushing for this in recent days.

TREASURER:

It became regrettably necessary because of the continuing damage that was being done and if there was to be a Commission of Inquiry with a terms of reference that was completely out of control and would only cause further damage. In politics sometimes you have to choose the least worst option and up until now that meant the course that we had been on for a long time. We were taking action, we were doing everything from how to deal with complaints, making banking executives accountable, all of these things and none of that will change, all of that needs to continue. But now it is necessary for the credibility and strength of our banking system to not allow further damage to be done and by the recklessness of the politics that has been played courtesy of Bill Shorten. He is a fraud and a fake when it comes to this issue on the basis that he has held out this as being some sort of cure all for everything but he has no banking policy of his own. It was an excuse him not having a policy and the terms of reference he couldn’t even identify. The Government is taking this in hand in the national economic interest.

PARKER:

Ok, despite that, all of what you have just said, it looks as though Bill Shorten is calling the tune.

TREASURER:

No, Bill Shorten didn’t even have terms of reference. Bill Shorten is a fraud. Bill Shorten was playing politics with our banking system. We are protecting the national economic interests by ensuring this issue is now put in the hands of a suitable judicial process through a Royal Commission that the Reserve Bank Governor himself said to me was now regrettably necessary but it was not in that position as much as a week ago.

PARKER:

Ok, what are the terms of reference? What is this Royal Commission? And we should note that it is more broad than just the banks it is the financial system as a whole. What are the terms of reference? What is it that you think will actually result?

TREASURER:

Well, it goes as you say more broadly than the banks themselves, it also deals with superannuation and insurance, wealth management practices and so on. It potentially goes into looking into issues of misconduct, behaviour, business activity of these entities that fall below community standards and they can make recommendations to that end. We have never said that a Royal Commission would deliver compensation of restitution on particular cases. I think that has been one of the great frauds that Bill Shorten sought to put to people who have been in these distressful situations that somehow this would answer those issues. It won’t answer those issues. It will look at behaviour practices and other things, it is looking at the actions that we have already undertaken which we will continue with and we have been urged to continue with and if there is anything further that can be added to that I am sure they will make those assessments. This is where we are now and that is what it will now do over the next 12 months, we expect commencing in February and then they will report back and we will deal with any recommendations or issues they raise.

PARKER:

So, Treasurer, is it your contention that the Government’s action to date means that the majority, the vast bulk of problems in the banking sector have already been identified and rooted out and that the Royal Commission won’t find anything of any significance?

TREASURER:

Well, I can’t prejudice the outcome of a Royal Commission but what I will say is that for the past few years we have been taking that necessary action. If we had done this as Bill Shorten was suggesting two years ago there wouldn’t have been an increase in powers or resources for ASIC, there wouldn’t have been a Banking Executive Accountability Regime, there wouldn’t have been the Ramsay Review, there wouldn’t have been the House of Representatives doing what they are doing with the Economics Committee, there wouldn’t have been the Financial Complaints Authority and the changes we have made in terms of people making the right deal on their superannuation. None of that would have happened because people would have said, you have to wait until the end of the Royal Commission. Well, we have gotten on with that action. Bill Shorten’s policy on a Royal Commission was an excuse to do nothing because he didn’t have a clue of what to do. How do I know that? Because when he was Financial Services Minister in the previous government, the Storm Financial crisis hit and he did nothing. He did nothing at all. He hasn’t got a clue. 

PARKER:

How much is this going to cost Treasurer?

TREASURER:

Well, regrettably this is going to cost $75 million. That’s what we have set aside for it and the Labor party said they could run one for two years, or however long, they had no clue how it was going to run and they said it would cost $53 million – they’re kidding themselves. We believe that appropriation should be enough but obviously we will have to deal with a Commissioner once they are appointed and work through other practical issues but that is what we will be making allowance for in the mid-year statement.

PARKER:

And it is going to last a year?

TREASURER:

It will go for 12 months. This thing can’t be an open-ended circus and it is not going to be because the Government will ensure that it isn’t and we have taken charge of it. If we had allowed this thing to just continue to be subject to the whims and recklessness of politics on occasion than that would have done harm to the banking system and I am talking about individual banks. This is not about having any truck with the banks, this is about a banking system upon whose people’s jobs depend, there are depositors, there are shareholders, there are customers, all of this together. It reached a tipping point this week which meant the Government needed to take the necessary but regrettable action we now have.

PARKER:

What does it say about the Government’s management of this issue that the big four banks themselves felt compelled to write to the Government today asking for an inquiry when they had previously resisted it?

TREASURER:

It just simply acknowledges that the recklessness of politics was doing irreparable damage and that needed to be brought to an end and that is what we have done.

PARKER:

The other big story of the day in Canberra today, we are going to discuss it shortly with Michael Pachi from our Canberra bureau, but Treasurer, Sam Dastyari, the Labor senator, Bill Shorten has ordered him to stand down from his position as whip and from a Parliamentary Committee over revelations about what he said regarding Australia’s interests in China, his subsequent explanation for those comments which has now proved to be misleading. Are you satisfied at the action that has been taken against Sam Dastyari today?

TREASURER:

No, I’m appalled, he should resign from the Senate and there is no other action he could take and if Bill Shorten leaves him in the Labor party for a second more, then he is bringing the Labor party into disrepute. We have just been going through this rather bewildering issue on citizenship, Senators having to resign from the Senate because of legal issues and laws of other countries where they have had dual citizenship and we have by-elections going on. I don’t think anyone is seriously thinking any of these individuals held actual dual allegiances, or allegiances to another foreign power but they have had to resign from the Senate. Now, we have a situation where we have a Senator who has been caught in the act of showing allegiance to a foreign power and he should resign. ‘Last chance Sam’ has run out of chances. This is incredibly weak from Bill Shorten, he needs to do this now or frankly I think Australians will render a judgment on him very harshly that he is prepared to tolerate, in the Labor party someone who would betray his country.

PARKER:

Alright, thanks for your time Treasurer.

TREASURER:

Thanks a lot.