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Wednesday, 6 December 2017
Page: 9975


Senator WHISH-WILSON (Tasmania) (17:50): by leave—I move Greens amendments (2) to (4) on sheet 8314:

(2) Schedule 1, item 2, page 9 (line 26), after "1052B", insert ", 1052BA".

(3) Schedule 1, item 2, page 11 (after line 7), after section 1052B, insert:

    1052BA Directions to ensure sufficient financing

(1) ASIC may give AFCA a written direction under this section if ASIC considers that AFCA has not done all things reasonably practicable to ensure that the operations of the AFCA scheme are sufficiently financed.

(2) The direction must set out the specific measures that AFCA must take to ensure that the operations of the AFCA scheme are sufficiently financed.

(3) ASIC must not give a direction under this section unless ASIC has given AFCA written notice of at least 1 month of ASIC's intention to issue the direction.

(4) AFCA must comply with a direction made under this section.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1).

(5) If AFCA fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that AFCA comply with the direction.

(6) A direction made under this section is not a legislative instrument.

(4) Schedule 1, item 3, page 29 (after table item 311), insert:

311A Subsection 1052BA(4) 100 penalty units for each day, or part of a day, in respect of which the offence is committed.

We won't be moving amendment (1) as there's duplication. I will briefly speak to amendments (2) to (4). Quickly, on amendment (1), review of the operation of amendments: we asked for a clause to be put in for an independent review that was comprehensive. That was tabled in parliament; that wasn't an legislative instrument. I think that has been dealt with now through the government's own amendments, and it's been recommended by other senators.

In relation to schedules 2, 3 and 4, the amendments are really important. I would really urge the Senate to support these amendments. Essentially, these give the Australian Securities and Investments Commission special powers and consideration to make sure that this new entity, AFCA, is properly financed—that it actually has the funding in place to deal with complaints. I've had experience of this with FOS, one of the entities that's being merged into AFCA. I think I've spoken on 7.30 on this issue, and I know that Senator Xenophon has also made public comments. If not the perception there's the reality that, under the current system, with a huge backlog, it's not necessarily in the banks' or the big financial service companies' interests to get through a big backlog of financial complaints, because they often have to pay them out, and that funding was a real problem. We had accusations that the senators looked at directly where complainants were told that their complaints couldn't be heard, because FOS didn't have the resources at that point in time. We have to make sure that the whole spirit of setting up AFCA—and the Greens support, in this debate, merging FOS and CIO—is that we have a better funding model in place so that there's no hanky-panky or monkey business with providing the funding that's needed to get through backlogs of these complaints.

As a backup—and this is specifically in relation to concerns raised by the CIO and stakeholders around them—we would give ASIC the oversight, which is outlined in some detail on schedule 1, item 2, page 11, where we insert:

    1052BA Directions to ensure sufficient financing

(1) ASIC may give AFCA a written direction under this section if ASIC considers that AFCA has not done all things reasonably practicable to ensure that the operations of the AFCA scheme are sufficiently financed.

(2) The direction must set out the specific measures that AFCA must take to ensure that the operations of the AFCA scheme are sufficiently financed.

(3) ASIC must not give a direction under this section unless ASIC has given AFCA written notice of at least 1 month of ASIC's intention to issue the direction.

(4) AFCA must comply with a direction made under this section.

Note: Failure to comply with this subsection is an offence (see subsection 1311(1).

(5) If AFCA fails to comply with the direction, ASIC may apply to the Court for, and the Court may make, an order that AFCA comply with the direction.

Schedule 1, item 3, page 29, under (4), has the penalties for not doing so. This gives ASIC not only administrative oversight et cetera but also the ability to actually look at the financing of this body. Hopefully that won't be a problem; hopefully this will work. If not, ASIC has the ability to fund those.

I do have some specific questions that I want to ask in relation to the new body, Minister, so I might get through those quickly, if that's okay. I will come back to the amendments in a second. This is in relation to the power to obtain documents under the new AFCA architecture. Will AFCA be given the power to obtain documents for non-superannuation related matters? Very quickly, under FOS's current terms of reference, where a party to a dispute without reasonable excuse fails to provide or procure information or to take any other step requested, FOS may make an adverse inference and rule against the party on that basis. Will AFCA have that power?