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Wednesday, 28 March 2018
Page: 2373

Senator LEYONHJELM (New South Wales) (12:06): I rise to oppose the Treasury bills before us today—the Treasury Laws Amendment (2017 Measures No. 5) Bill 2017 and the ASIC Supervisory Cost Recovery Levy Amendment Bill 2017. These bills burden financial markets with unwarranted red tape and burden the Productivity Commission with an unwarranted commissioner. The bills will mean financial service providers will face criminal penalties for intentionally influencing an index price or interest rate that the government considers to be a financial benchmark, such as the bank bill swap rate. Individuals will face up to 10 years in prison and a fine of nearly a million dollars, while businesses face fines of nearly $10 million.

This is outrageous. Intentionally influencing a price should not be a crime even if others put great importance on that price. If someone is stupid enough to base their decisions on the price of eggs, you shouldn't be banned from taking advantage of this by buying up eggs and driving up the price. The government says that intentionally influencing a price is already a breach of civil penalty provisions. This is wishful thinking. The government's case against ANZ, NAB and Westpac for alleged market manipulation and unconscionable conduct in relation to the bank bill swap rate is still before the courts. I wouldn't be at all surprised if it fails.

Financial service providers will also need government approval to administer something that the government considers to be a financial benchmark, even though the provider might not want what they administer to be used as a benchmark for others. Someone who fails to get this approval will face five years in jail and a six-figure fine. Once approved, a financial service provider will need to pay the government a fee for the privilege of being regulated. This is akin to Tattslotto needing the approval of Lottoland and needing to pay Lottoland a fee simply because Lottoland chooses to use Tattslotto as a benchmark.

This is regulation gone mad. Regulators seem to view financial markets as something they need to control. They reveal a Soviet-style mindset that is not accepted anywhere else in the economy. Part of the reason for this is that no-one has sympathy for financial service providers. Unfortunately, every bit of red tape on financial services reduces the chances of real competition in financial services where small players enter the market to offer better, cheaper services to everyday Australians. Part of the reason regulators get away with Soviet-style regulation of financial markets is that financial markets seem to them to be more complex than other markets. But this complexity is a reason to be particularly worried about regulation, because there is a massive risk that regulators will get it wrong.

The Treasury bills before us today also require an additional commissioner at the Productivity Commission, with experience in dealing with Indigenous communities. I fear that this lends weight to the questionable idea that those suffering disadvantage know how to overcome that disadvantage and that we must not pursue policies that disadvantaged people oppose. I think it more likely that unpopular policy options, like abolishing the Community Development Program that keeps people in squalid, remote communities, offer the best chance for overcoming disadvantage. For this reason, and because we do not need more Soviet-style regulation of financial markets, I oppose these Treasury bills.