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Thursday, 24 May 2001
Page: 27038

Mr KELVIN THOMSON (3:15 PM) —My question is also to the Minister for Financial Services and Regulation. Minister, why have you not asked the general insurance industry to make any contribution to the HIH bailout from their $10.9 billion asset reserves, instead of leaving all of the burden of the collapse to fall on taxpayers and HIH policyholders? Is your reluctance to seek an industry contribution related to the insurance industry's generous political donations to the Liberal Party, which include $682,000 from HIH itself?

Mr HOCKEY (Minister for Financial Services and Regulation) —No. The substantial legislative changes which the government has announced for the reform of the insurance industry in Australia are going to cause the insurance industry overall to have to raise significant amounts of capital to meet the future legislative requirements. In addition, the industry itself is helping significantly in setting up the new non-profit company, which is going to be owned and run by the industry, and it is providing enormous logistical support to help to get funds out to those people who are enduring hardship.

When there were banking collapses in the early nineties, the Keating government took 12 months to bring in the Commonwealth Bank to help rescue people involved in the State Bank of Victoria collapse. In this case, it is the collapse of a private sector organisation—an insurance company—on a scale never seen before in Australia, and the government has no government insurance company that is available to simply take over the processing of claims. At all times, our sole focus is to help people in hardship—that is what we have focused on.

Mr SPEAKER —The member for Kingston!

Mr SPEAKER —The member for Kingston is warned!

Mr HOCKEY —We totally refute any suggestion that any political contributions or activity have in any way affected the proper enforcement powers of APRA or any of the activities of the government in relation to this matter.

I would like to make one further point, which is an important point in view of some comments about superannuation. Last year, I introduced a bill into the parliament to give APRA greater powers to protect superannuation. When I put those powers to the Senate, Labor watered down the measures of the bill. The penalty for noncompliance was cut in half by the Labor Party and the Democrats, from $11,000 to $5,500. So, now, if superannuation trustees fail to lodge returns with APRA or the Australian Taxation Office, if they fail to provide other information requested by APRA or the Australian Taxation Office or if they fail to provide statistical information to APRA, they face half the penalty that we on this side of the House wanted.

Dr Martin —Mr Speaker, I rise on a point of order. The question was specifically in reference to HIH and insurance, and the minister has clearly, over a number of minutes, strayed from that question.

Government members interjecting

Mr SPEAKER —I do not need a great deal of help from members on my right. My observation was that the minister was making reference to APRA and, while I am not an authority on the insurance industry, for that reason I deemed him to be relevant.

Mr HOCKEY —So, whilst we are trying to be tough on the financial services industry, the Labor Party, as best shown by the example of this bill, went soft when they were asked to be tougher with people not complying with the law.