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Monday, 17 September 2012
Page: 7043

Senator MILNE (TasmaniaLeader of the Australian Greens) (15:29): I move:

That the Senate take note of the answer given by the Minister for Finance and Deregulation (Senator Wong) to a question without notice asked by Senator Milne today relating to finance and the Australian Securities and Investments Commission.

In today's Australian Financial Review, the head of the Australian Securities and Investment Commission has come out and made it very clear that the regulator is struggling to do its job. The report that has been released today says that ASIC has just 26 staff to cover 25 investment banks, which means that they are reviewed every 1.3 years while the 220 hedge funds may be looked at once every 6.6 years. While the big four banks are reviewed every year, the 135 insurers are only reviewed once every seven years. The top 20 financial planners are reviewed once every 1.7 years while the next 30 are reviewed only once every 3.8 years. The big four audit firms are reviewed once every 1.5 years and the remaining 72 audit firms are reviewed less than once a decade.

Quoting from Mr Greg Medcraft, the chairman of ASIC:

It will be clear to any reader of our surveillance chart that we do not conduct an in-depth surveillance of all the entities we regulate each year. Further, we do not necessarily review all aspects of an entity’s business when we do conduct surveillance.

He has also stated:

I think it is important that people know we aren't on every street corner. We would like to be but we are not.

This is a really critical issue because people around Australia were horrified about what happened in the global financial crisis. People want to make sure that all of our financial institutions are properly regulated and that the regulations that relate to them are properly looked at, overseen, monitored appropriately and so on. To now discover that ASIC has said, 'We can't do the job with the resources we've got' is a matter of real concern to the Greens. For some time we have also expressed concern about, and put up a number of proposals to raise, revenue. I was pretty appalled to see the Treasurer come out at the weekend and boast about the fact that Labor is raising less than $24 billion of what the Howard government raised in tax revenue—and that is on the tax-to-GDP ratio.

The Greens have negotiated Denticare with Labor, which is a fantastic new innovation. It is the start of universal access to dental care. We want to see more money going into public education. We think that is critical and we do not want it left until 2020. I do not want to see public servants losing their jobs and organisations like ASIC unable to do the job that Australians really want to have done. That is why the Greens have said, 'Let's raise the revenue; let's actually get out there and do it.'

What I asked Senator Wong today, as the Minister for Finance and Deregulation, was whether she is positioning the government for the mid-year economic forecast to impose more efficiency dividends, which will mean greater losses of public servants and less ability to oversee ASIC and other essential services.

The Australian people have had enough of losing critical public sector jobs. Tony Abbott, the Leader of the Opposition, is out there saying that if it were up to him he would be slashing even more jobs in the public service than the Labor Party intends to do with new imposed efficiency dividends. We have already seen it in Queensland, with Campbell Newman slashing 14,000 jobs—four thousand in health, for example; but I honestly think that if Australians start to sit down and wake up to where these jobs are being taken from, and the fact that the efficiency dividends to date have bitten so hard that organisations like ASIC cannot do the job that they are expected to do, then people are going to be angry. If some of these institutions are shown to have mismanaged their responsibilities or failed, people are going to ask questions as to how that is possible. You are going to have the head of ASIC, Greg Medcraft, out saying, 'Well, I told you it was entirely possible because we can't do the job that Australians expect us to do.'

I would like the Senate to rethink its total focus here on continuing to cut public service jobs, which means cutting the services that we need to regulate things like our financial system. Surely, after so many people lost so much in the global financial crisis—particularly through superannuation losses—they would like to be confident that ASIC can do the job. I call on the government and the coalition to change course on this one.

Question agreed to.