SALLY WARHAFT:
Welcome to fight club. This afternoon we have Shadow Attorney General Mark Dreyfus and the Member for Isaacs along with Bruce Billson, Minister for Small Business and the Member for Dunkley. Bruce I will start with you first. Arthur Sinodinos after a couple of days of pretty intense pressure has stood down after becoming embroiled in the NSW ICAC inquiry. He had the full support of Tony Abbott the Prime Minister and today he changed his mind. What happened?
BRUCE BILLSON:
Well I think Arthur has done the right and honourable thing. The inquiries that ICAC in NSW are undertaking will be his opportunity to provide input. He will be full and frank in his explanations and he has behaved in a gracious and honourable way today. I think that's good for the Westminster tradition. He's been asked repeatedly about this issue in the Senate and has been upfront and open about that and now will be his opportunity to provide input to ICAC.
SALLY WARHAFT:
But if it's the right and honourable thing to do today – why didn't he do it yesterday?
BRUCE BILLSON:
Well it was quite clear that despite the many challenges that our nation faces that the Opposition was absolutely fixated on this. It was making it very difficult for Arthur to discharge his important responsibilities so he stepped aside and we now have an acting Assistant Treasurer. Arthur is an outstanding individual, a very honourable person and thought it best to take this course of action and I'm really looking forward Sally to seeing these investigations concluded.
SALLY WARHAFT:
Mark Dreyfus you got your way today without bringing out the heavy hitters to demand that Arthur Sinodinos stand down. In fact the demand was to give a statement to the Senate. Would you have preferred that or are you happy with the outcome?
MARK DREYFUS:
That's what we were asking for. He hasn't given a full and frank statement to the Senate and neither has the Prime Minister given a full and frank statement to the Parliament on the circumstances. You are quite right Sally to ask "what has changed since yesterday?" We want to know what's changed since Mr Sinodinos was appointed? The Prime Minister wanted to say at the time of his appointment that there wasn't a cloud hanging over Arthur Sinodinos but yesterday in the house he wanted to say that all of the events that were being looked into by ICAC concerning Arthur Sinodinos before his time as a Minister. You can't have it both ways.
Today the Prime Minister just stone walled, said nothing, and wasn't prepared to answer any questions as to what he knows about Arthur Sinodinos' business dealings and what he knows about Arthur Sinodinos' misleading of the Senate and apparently the Australian people are going to have to wait.
I'm pleased to hear Bruce talk about the Westminster tradition because we had it ignored today because there was no accountability in the parliament.
SALLY WARHAFT:
Well I don't know how you can say that Mark Dreyfus - he has gone further than any of you even asked. We had our reporter Latika Bourke and she told me many people in the ALP were sad that one of the good ones has taken a hit. Do you share those sentiments? Is Arthur Sinodinos an unlikely candidate to be the first scalp to have to stand aside at least temporarily?
MARK DREYFUS:
Oh well he might be an unlikely candidate for the first scalp. We have here someone who is under investigation by ICAC and is going to appear before the ICAC in NSW to give evidence and there is a great deal that we and the Australian people don't know. There's a great deal that the Prime Minister is not prepared to tell about the circumstances here and Mr Sinodinos simply didn't tell the Senate, despite being asked to. Instead of giving a full and frank account of the events of his directorship and chairmanship of Australia Water Holdings, he simply stood aside.
SALLY WARHAFT:
It's a tricky one for the Labor party, isn't it Mark in that the inquiry in NSW includes both Labor and Liberal – it's crossed over. Is that why there was a reluctance from your side to insist on Arthur Sinodinos stepping aside?
MARK DREYFUS:
Not at all and I think the conduct of the NSW Premier Barry O'Farrell who insisted that Minister Chris Hartcher when under investigation by ICAC, not only stand aside but resign and sit on the cross benches in the parliament, as is the case for some other Liberal members of parliament pending the completion of ICAC inquiries.
Tony Abbott has simply done nothing. He waited for Senator Sinodinos to do something.
SALLY WARHAFT:
Bruce Billson, Arthur Sinodinos of course had a very important role as the Assistant Treasurer. What will that mean? Will his position be replaced? What will happen in the lead up to the very important May Budget?
BRUCE BILLSON:
Well Sally he does have a very important role and that reflects a long career of providing outstanding leadership and great insight into the interests of the country…
SALLY WARHAFT:
Which makes it all the more surprising Bruce that he's got himself into this position I have to say.
BRUCE BILLSON:
Well it's curious, Mark's a QC, he's a smart cookie and he is not overplaying his cards, he's being very careful. But it's a bit rich to conflate rather specific allegations being made elsewhere with Senator Sinodinos' opportunity to provide some input to the inquiry. But let's not get into that in too great detail. It's just interesting how there seems to be a little bit of skirting around what's actually going on and Arthur will have his opportunity to provide some input.
SALLY WARHAFT:
Of course he will, but while we have to wait for it, people will look at the perceptions of this won't they? That the situation he is in and the allegations of association with this water holdings company. He is a smart man and I would have thought this is something he would have been able to foresee.
BRUCE BILLSON:
That's why it's a wise decision that he has taken to stand aside, because there is no suggestion he would be getting clear air from our political opponents. The Minister for Finance, Mathias Cormann will be discharging those ministerial responsibilities while Arthur stands aside and provides his input to the inquiries. There is important work to be done, you're quite right. The budget is being prepared and we have an extraordinary task ahead of us to turn around the budget position that we've inherited and that's requiring the best of all of us. While Arthur is standing aside and the inquiry takes its course, the Finance Minister will be responsible for that Assistant Treasurer role.
SALLY WARHAFT:
You're listening to Fight Club with Bruce Billson, the Minister for Small Business and Member for Dunkley and Mark Dreyfus, Shadow Attorney General and Member for Isaacs. Stuart has phoned in from Ivanhoe to join in on fight club. Hello Stuart.
STUART:
Good afternon, I have a question for Mark Dreyfus in particular. I can't understand how he can take this position when not so long ago Craig Thompson was in a similar circumstance where he was essentially charged with some pretty serious impropriety. You look at Labor's response compared to what the Libs have done this time and in particular the Senator in question basically resigning. I think that an explanation is required.
SALLY WARHAFT:
Alright, let's hear from Mark Dreyfus.
MARK DREYFUS:
There are several things to be said. Craig Thompson was never a minister and after some time he went to sit on the cross benches but most importantly, we were talking about criminal charges against him which for many months after the Liberal Party first started to raise allegations against him, were not heard and he is entitled to the presumption of innocence – as is Arthur Sinodinos entitled absolutely to the presumption of innocence. Something that the Liberal Party were never prepared to extend to Craig Thompson. Don't judge this by the fact that Mr Thompson has now been convicted.
It's for Mr Sinodinos to explain the circumstances- that's what he has failed to do. The Senate demanded that he do so, he didn't. Today in question time the Prime Minister was asked to explain what he knew about the circumstances of Arthur Sinodinos' involvement in Australian Water Holdings. He's said nothing at all, he preferred to say "Mr Sinodinos has stood aside and let that be the end of the matter for the time being." And of course it's not the end of the matter.
The Australian people are entitled to be told what the Prime Minister knew what he knew when he appointed Mr Sinodinos to the ministry and all of those matters. I don't think there is much of an analogy to be drawn other than that, in Craig Thompson's case the opposition were quite prepared to charge and convict even before legal processes had been commenced against Craig Thompson.
SALLY WARHAFT:
The threat that is there though and Bruce you can respond to this, is a broader issue of ministerial accountability. It's only when you get into government I suppose that you realise that it's a different game to opposition and if it's not the Labor Party and government going through this, then it will be the Coalition going through this and it's sorting out where accountability begins and ends. Is that tough for a new government?
BRUCE BILLSON:
Well it's an adjustment that is needed of all new governments Sally. You're quite right – I mean the accountability is on the Ministers of State with important roles and responsibilities, the use of tax payer resources that need to be respected and used wisely, the scrutiny and the impact of decisions that are taken is a much higher level of responsibility and accountability within government.
That's why shortly after the change of government, Prime Minister Abbott introduced a tough code of conduct that had all of those very high, and justifiably high, expectations reflected in the responsibilities that we discharge. In opposition, there is an expectation of appropriate conduct, courtesy and respect for the tax payer and the community more generally.
But in terms of decision making, its government minister's that make decisions. We have this saying in public life and I'll share it with your listeners – 'politics is about explaining and complaining'. When you are in government you do a lot of explaining and when you are in opposition there is a lot of complaining. Now there are different accountabilities that accompany those different roles and what you are seeing is the best of the Westminster tradition play out reflecting those differentiated accountabilities and responsibilities.
MARK DREYFUS:
We'd like a bit more explaining from this government and a bit less complaining. They still think they are in opposition and Barry O'Farrell the Premier of NSW nailed this government a few months back when he said "it's time for them to start behaving like a government and stop behaving like an opposition."
SALLY WARHAFT:
Gentlemen we better move on to a couple of the other issues that are going around and the bonfire of regulations for the government's repeal day, set for next Wednesday. Is there a fine line Mark Dreyfus between an ideological battle of just tearing down regulations because that's not what you believe in or a genuine attempt to get rid of really useless regulation and the necessity of spring cleaning when a government comes in?
MARK DREYFUS:
Housekeeping in the statute book is something that all governments have done for decades in Australia. The first statute revision bill was put through by the Whitlam Government in 1974. Our government repealed thousands and thousands of redundant regulations and acts of parliament and cleaned up the statute book in various ways. What's been startling to me is to see this new government engaging in a huge stunt of pretending that the housekeeping work that they are doing on the statute book is something new or something that no other government had every thought of before.
My real concern about it is that undercover of perfectly standard cleaning up of the statute book, we're actually seeing some substantial changes and one of them is the threatened removal of the massive protections we have put in place in the financial advice industry.
SALLY WARHAFT:
Mark Dreyfus we have a talkback caller who has phoned in with a question about this so we might go to Andrew in Williamstown.
ANDREW:
I've got a question for the gentlemen from the government. Why is the government repealing the law that says the financial planner must act in a client's best interest? This is making it easier to go back to the bad old days of secret commissions and when planners were salesmen? I just don't understand why that's called red-tape? They are supposed to be professional people giving advice yet you want to repeal the law that legally says they have to act in their clients best interests, it just doesn't make sense.
SALLY WARHAFT:
Okay let's get a response from Bruce Billson, it's a fair question.
BRUCE BILLSON:
Good question Andrew and you touched on one of the reasons why we are going about trying to right size this regulation. You are quite right, they're professional people and there's a whole lot of certification and accountabilities attached to the individuals operating in this financial planning space. The products themselves are regulated and then there is a regulatory overlay about how they interact with their clients. It's quite an itemised list of things that need to be taken into account – all of which make it very clear on what acting in the best interests of the clients looks like, what sort of disclosures are required, what sort of constraints there are on remuneration.
What we're concerned about and what many in the industry are concerned about is the whole point of accessing financial advice relies upon it being affordable and accessible. These additional overreaching requirements which have not proven to be any additional benefit in terms of safeguards are adding costs and they are making it harder for people to get the advice they rely upon.
We are convinced this is the right direction to go in. Not everyone has got $20,000 up front to get a full suite of financial advice with a big portfolio of investment options. Others are looking for more tailored, specific, very transactional type of advice and the changes we're making are reflecting this goal of accessible and affordable financial advice for a whole range of people who we hope will get good advice and make good investment decisions.
MARK DREYFUS:
I think it's actually a great benefit to consumers to require advisors to act in the best interest of their client. I think it's a great benefit to abolish trailing commissions. It think it's a great benefit to require that advisors not push product sales ahead of providing advice. These are all benefits that are important consumer protections and this government wants to do away with them. Ironically, on just about the fifth anniversary of the collapse of the Storm Financial Group, it's an example of why we will closely examine every single one of the repeals that are being put forward.
Where they are just housekeeping, where there are things that don't have any effect and that's the case for the vast bulk of repeals that were put up today. Of course we will support them but where there is important consumer protection being taken away, which Bruce Billson was to say being no benefit to consumers, we'll be fighting every inch to make sure those important reforms that the Labor government brought in, that improved financial advice going to Australians particularly in the superannuation industry, that they stay where they are.
BRUCE BILLSON:
Sally that's quite an interesting argument that Mark is putting forward. Of the list of obligations that are on those providing advice, one generic, hard to define, difficult to enforce, descriptor at the end of a long list of very specific accountabilities, changing that does not mean there is no consumer protection. Let's end this fiction that had the government system been in place that somehow Storm would not have happened – that's just nonsense.
What we need is right sized and effective regulation, recognising that if someone fronts up to a bank counter and says "should I put this $20,000 into a fix term deposit?" They don't need to sit down and be asked "well what are your financial objectives?" That's just ridiculous and there is quite a different range of consumers who do walk up and ask "what do I do with this term deposit?" All the way through to the very important task of people structuring their retirement savings and income strategies and that's what we are seeking to accommodate.
SALLY WARHAFT:
Before I let you both go, what do you make of this Switzerland solution to the Parliament House gym battle? The heavy hitters did get involved – Tony Abbott said when he goes to the Parliament House gym he likes Sky News on. But of course others have said they prefer the ABC. It turned a little bit nasty but it's been sorted out. Mark Dreyfus do you have a preference?
MARK DREYFUS:
I solved this by swimming in the pool, the place in which it's impossible to watch TV. But I think it's a matter for anyone, what they want to watch. We have a variety of media in Australia, that's a great thing. Perhaps they should get more TV's in the gym.
BRUCE BILLSON:
Sally, if I get the rare opportunity I am out on the tennis court, trying to contend with John Alexander, and thinking about how we can relieve some of this extraordinary red-tape burden that is gumming up our economy and making it very difficult for time poort small businesses and that's what repeal day is all about.