Mr CADMAN (10:13 AM) —The Financial Sector (Collection of Data) Bill 2001 is a bill that seeks to draw together the framework for the collection of data necessary for the regulation of a number of industries. The industries covered by this legislation are banks, credit unions and building societies—that is, the deposit-taking institutions, insurance companies, superannuation funds and friendly societies. APRA, which is the prudential regulator, supervises 11,000 institutions including 300 deposit takers, 40 life insurers, 160 general insurers, approximately 50 friendly societies and directly or indirectly about 10,000 superannuation funds. This process is necessary to prevent duplication of collection of data. The other two main sources that government requires data from are the Reserve Bank and the Australian Bureau of Statistics. Therefore, we have three organisations collecting similar data. This provision allows for the streamlining and the cutting of red tape and for a reduction in paperwork, but it also allows for there to be adequate collection of data.

The review on methods for collection of APRA data was conducted in 1999—some three years ago. We seem to be moving quite slowly in this area. This legislation notes the presence of disparate collection systems from predecessor agencies, mainly the Insurance Superannuation Commission and other agencies, and that the data is in various stages of disrepair. That is probably too slick a response to explain shortcomings in the organisation—it is easier to blame the data than to blame the people. I am not aware that the Insurance Superannuation Commission has ever had any trouble with failures of the HIH type. So part of the problem is the change in organisations and the restructuring and additional responsibilities that APRA has been asked to take on. The structure of the legislation which launched APRA is also inclined towards a corporations base rather than an insurance base. Therefore, APRA is not generally as well equipped to deal with insurance matters as was its predecessor. Part of that inadequacy, I believe, has resulted in the failure of HIH. APRA needs to come clean and acknowledge its shortcomings—not blaming data, not blaming antiquated systems—and look fairly and squarely at whether their own management processes were adequate to deal with these industries or whether they were coasting a bit.

APRA has made a statement that it will work closely with the Reserve Bank and the Australian Bureau of Statistics to improve and, where possible, rationalise the content of authorised deposit-taking institution returns. I do not know whether APRA, as the newest body in the field, is the one best equipped to make those assessments, but I understand that it is APRA who will harmonise and to whom the information will be channelled. I would like to see APRA publicly demonstrate its competence by laying out its management plan in the collection of data, acknowledging that it is not going for an overkill. A lot of this will relate to the affairs of individuals as well as to the management processes being adopted by the bodies that it is supervising. Therefore, some care is needed on privacy factors that there is not just a wish to overkill—to seek to gather too much information—to demonstrate that APRA is assiduously on the job. Results are the things that count, not how much data you collect or whether you can blame that data as being out of date.

I have some concern about APRA's skill in being able to bring together the data. I would like to see management systems and the processes—both for the retention of privacy and also in the expedient setting up of efficient data management systems—publicly stated. Management of data is a skilled process and the public of Australia will need to be assured, during the royal commission and other things that are afoot, that APRA is a competent body to manage the data that it will be collecting. I note that the Chief Executive Officer of APRA, Mr Graeme Thompson—I do not think he is related to the spokesman for the opposition—said before the Senate Economics Legislation Committee:

Again, the excuse is used of flawed and out-of-date material. That might be an easy excuse. I look forward to the way in which APRA is going to pull itself into gear and give the Australian people confidence that it is adequate to perform the task it has ahead of it.

The main provisions of the bill deal with the bodies which may be registered for the collection of data. These are companies which fall within the Commonwealth's corporations power. Their sole or principal business activity in Australia is to borrow money and provide finance. Debts due to the corporation from the provision of finance exceed 50 per cent, or such percentage as prescribed, of the value of all the assets of the corporation, or the corporation provides finance in association with the retail sale of goods and the value of debts due to the corporation from that provision of finance exceeds $25 million or the amount prescribed.

The bill outlines the standards that will be adopted by APRA. APRA must consult with the entities concerned and try to minimise the impact on the entities concerned. The opposition has proposed an amendment which would change that provision. I think that would be somewhat foolish. This is a new organisation which is gung-ho to prove that it can handle the responsibilities it has been given. It intends to collect as much data as it possibly can. If this is done without consulting the entities concerned, if data matching techniques are used and great banks of data are shifted from one organisation to the government's purview, this offers the prospect of some overenthusiasm by an inexperienced organisation, compared to experienced agencies such as the Reserve Bank and the Bureau of Statistics, and the prospect of some abuse by government agencies.

I have no problem with the provision. It is a sensible one. The collection of data should be done properly, in consultation with the bodies concerned—and, I would hope, in a way that matches the requirements of the Reserve Bank and the Australian Bureau of Statistics. Clause 13 indicates that differing standards may be determined for different classes of financial sector entities. That is also a very sensible provision because the difference between banks and insurance companies is substantial, and that needs to be acknowledged in the way in which the data is collected.

There is no statistical data on how much time this consolidation of information will take. I suggest that APRA needs to focus on the service it is providing. In financial services, Australia's competitive edge can be just as easily affected by regulatory requirements and legislative provisions which are too onerous, just as it can be affected by other factors. I say to APRA and to those who supervise financial services that we must retain, and maintain, the absolute control and certainty that Australia has been able to demonstrate over many years. At the same time we must be able to do so in an efficient and competitive manner. If our processes here are sure ones, but slow and inefficient, that will not allow us to develop as a world-class provider of financial services. We should be not only sure and safe but also efficient. A concentration on excellence is something that I would like to see APRA publicly expressing.