Transcript: Sky News AM Agenda

12.30pm | February 05, 2019



SUBJECT/S:  Banking Royal Commission.
LAURA JAYES, HOST: Now Jenny McAllister, Labor Senator from NSW. Jenny McAllister, thank you for your time. What have you made of this report and the Government's response? Are both elements right here?
SENATOR JENNY MCALLISTER, SHADOW ASSISTANT MINISTER FOR FAMILIES AND COMMUNITIES: Well, this is a damning report on the industry and an indictment on a culture of greed and I think it aligns with the community's perception about the problems in the sector. But the Commissioner has done his work now and it is up to the politicians and to the Parliament to respond. And my great concern is that in setting out their response yesterday, the Government has said that they will act on the recommendations. But they have actually declined to say that they'll accept them. And that troubles me greatly. They resisted the Royal Commission from the beginning, they voted against it 26 times, that comes on top of their attempts to wind back the protections that were already put in place by Labor for the financial services sector. And now they are providing a mealy mouth response which says that they'll act on the recommendations but not that they'll accept them.
I think that's a problem.
JAYES: Ok Jenny McAllister just hold tight there for moment. We are just getting Malcolm Turnbull speaking to a camera. I'll go to him live.

JAYES: I want to bring back in Jenny McAllister. A little bit of honesty from the former Prime Minister. Do you welcome his comments?
MCALLISTER: Well it raises a very interesting point doesn't it? Why didn't the Liberal Party act sooner when the community clearly demanded action? We just heard from Malcolm Turnbull, Australia's most famous banker turned politician, but if you look at the ranks of the Liberal Party you see a range of senior figures in the last five years, all drawn from the banking and financial services sector. So you see Kelly O'Dwyer, Arthur Sinodinos, Minister Corman, you see Mr Frydenberg, all drawn from careers in the financial services and banking sectors.
JAYES: That's a bit rich, hang on, that's a bit rich Senator when you have Anna Bligh a former Labor Premier as the head of the Australian Banking Association?
MCALLISTER: I think the point I'm making Laura is that the obligation of the Parliament was to look at these issues through the lens of the consumer and I think so many people in senior roles in the Liberal Party were so close to the banking sector that they just missed it. There is nothing wrong with people from financial services going into Parliament, in fact I think it is quite good but the problem comes when as a group, you are unable to see the problems that are confronting consumers and to squarely face up to what is causing them. And the consequence of that was they sought to unwind existing protections that had been put in place for consumers by Labor. It was one of the first things the Abbott Government committed to. They then resisted at every turn the calls for a Royal Commission and had we had a Royal Commission when Labor called for it three years ago, right now we'd be in the implementation phase. These issues would have been surfaced much earlier, we would have been able to legislate to respond to them however, we are now in a situation where a Royal Commission is reporting just before an election. The Treasurer is indicating that he does not intend to take legislation into the Parliament.
JAYES: Where is he doing that? 76 recommendations. I spoke to him this morning. He says he wants to adopt all 76 recommendations and he's putting in a taskforce to do that.
Do accept that we are three months out from an election, are you splitting hairs here? I just don't quite know why you are doubting his commitment to actually put in place all these recommendations? Timing is an issue before the election. That's the only problem, isn't it?
MCALLISTER: Three things Laura. I've read the document. The Government response. They say they will act on the recommendations. They do not say that they accept them. And I think that's very troubling. Secondly, this could all have been done a lot earlier. Because acting on an idea is not the same as accepting the principle set out by the Commissioner and my very great concern is that the Government has not done that. The second thing is that we could have done this much earlier. This could all have been completed some time ago and legislation been on foot. Of course, because of the Government's delay, we find ourselves that at five minutes to midnight and they are looking to keep the can down the road. The third thing is that we are issuing an invitation to the Government to work with Labor. Work with the Opposition to deal with the reforms on which we can agree and bring legislation into the Parliament as soon as possible. And I really think that Mr Frydenberg and his colleagues ought to reflect on that offer, because the public expects action. The Commissioner has done his work and it's now time for the Parliament to do its.
JAYES: Ok, now I'll ask you about mortgage lending as well. Mr Hayne, Commissioner Hayne said that the home loan borrower should pay the mortgage broker for finding a loan. This would be a huge shake up of that industry. We even had an industry representative warning this morning that if Labor did implement this policy because the Government has stopped short, that it would be a return to the dark ages. Are you worried about that?
MCALLISTER: The Labor Party accepts the recommendation and we accept it on the basis that the Commissioner sets out that when a broker or any other person providing financial advice provides advice to a consumer, the consumer ought to know, ought to be confident that that person is acting in their interests. That there is no other agenda. Now we accept that this is a big change to the way that the industry is structured and the way that people presently pay for these products and our commitment is that we would work through this with consumers and with the industry itself. Yes we accept it.
JAYES: Could you ensure that no small businesses, no mortgage brokers would fold under the pressure?
MCALLISTER: We need to work through this with the industry. Bear in mind we've had this report since you have at half past four yesterday afternoon. You might have even been in the lock up and had the privilege of seeing it a bit earlier but we haven't had it for as long as the Government and they had three days where they kept it back from the public. We are now working through thousands of pages of detail and will of course be talking about the implementation arrangements when we have had the chance to do that.
JAYES: I want to ask you about Ken Henry and Andrew Thorburn now. They were singled out for special criticism from the Commissioner. It is your view that their position at NAB is tenable because I can tell you in the last half an hour or so, both have said publicly that they are going to stay on and they are going to lead NAB through the recommendations handed down by the Royal Commission. Is that the right course of action?
MCALLISTER: Look, these are really ultimately matters for NAB and I think the focus for people in my position in the Parliament, ought to be the implementation of the recommendations. There's been a range of matters referred off to ASIC and APRA for further investigation and potential prosecution and the regulators should do their job in that regard and that will involve an interaction with all of the institutions that have been referred. But our job really as Parliamentarians isn't to comment on individuals in the sector, it's to get on with the legislative and regulatory reforms that the Commissioner recommends.
JAYES: Just finally, we know that criminal charges against three institutions have been recommended by the Royal Commission. Do you expect anyone to face jail?
MCALLISTER: Look, these ultimately are matters for the courts, but can I say this, it is critical that the resources are made available to the regulators and to the Commonwealth Department of Public Prosecutions, Director of Public Prosecutions to pursue these matters. To that end, I'd note that the Government over the course of its five years, has cut 200 million from ASIC's funding and that is a big problem and the Government really ought to reflect very carefully on the resourcing available for ASIC. Our commitment of course in the light of the Royal Commission, is to make sure that the Director of Public Prosecutions has the resources that it needs to do this work and we've said that we'll allocate 25 million to that body to undertake this role.
JAYES: Jenny McAllister appreciate your time this morning. I'm sure there'll be a lot of reflection in a couple of different circles today. Appreciate your time.