ROSS GREENWOOD:
Kelly as always, many thanks for your time.
KELLY O'DWYER:
Great pleasure Ross, nice to be with you and your listeners.
ROSS GREENWOOD:
I want to start not by asking you a question, I'm going to do this a little differently. I want to start by getting George Christensen, of course a Nationals member of the House of Representatives, a man who threatened to cross the floor on this particular issue. Here's what he had to say today.
GEORGE CHRISTENSEN:
I just don't understand why it took a number of National Party backbenchers to drag the Prime Minister kicking and screaming to this decision. But we've got the decision, it's a good decision.
ROSS GREENWOOD:
So could you just help George Christensen there, not me necessarily, Kelly. Just tell him why is it that it took those Nationals to actually prompt the Government to make that decision?
KELLY O'DWYER:
Well let me say this Ross. The Government, of course, has been dealing in a very real and practical sense with some of the misconduct issues that have been raised in the financial services sector. We recognise that there have been people who have been treated badly by the banks and who need access to justice in a timely manner and rather than waiting for the outcome of inquiry after inquiry, we have acted and we have put in place legislation that now is sitting in the Senate to establish a one-stop shop for consumer complaints – the Australian Financial Complaints Authority – that will be an absolute game-changer for those people that will see small business, for the first time, be able to access compensation of up to $1 million if they're found to have had a viable case and that's going to be done because we got on with actually making changes in this space. We've strengthened the regulator, we've made sure that they are appropriately resourced by putting a levy in place so that there can never be any question that the conduct regulator, ASIC, is able to do its job in actually policing bad behaviour and we have also made sure that we've lifted the standards for financial advisers. They're just some of the many things that we have been doing in order to make sure that people can have confidence in the financial system. What has changed now? I'll tell you what's changed. Despite the fact that we know we have the world's best prudential regulation and oversight of our financial system…
ROSS GREENWOOD:
That would suggest you don't need a Royal Commission.
KELLY O'DWYER:
No, no, in terms of macro-prudential oversight. We recognise that the chorus of ongoing speculation and fearmongering about the need for a commission of inquiry or a banking inquiry has got to the point where it is disruptive, where it is…
ROSS GREENWOOD:
So you've done this because of popular opinion then, Kelly, not because it's actually good policy, but because this is something that you've heard the chorus and you're actually responding to the chorus. The chorus had been there for a while.
KELLY O'DWYER:
No let me just finish the sentence, Ross. It actually now risks undermining the reputation of Australia's world class financial system and that's what's been very clear as a result of the letter that you referred to in your opening remarks, that's what's been very clear, when the Treasurer had consultations with the Chair of APRA and the Governor of the Reserve Bank of Australia, and so the Cabinet made a decision today to put together sober and sensible terms of reference for a Royal Commission into the banking, superannuation and financial services sector.
ROSS GREENWOOD:
Alright my next comment comes from one Malcolm Turnbull, this is two days ago as a matter of fact. Here's what he had to say.
MALCOLM TURNBULL:
We have made it very clear that we are not going to establish a Royal Commission and the reason for that is simply because we want to get on with the job now.
ROSS GREENWOOD:
That was two days ago, Kelly. It's not a long time ago since he said there's no Royal Commission.
KELLY O'DWYER:
Well look, I'd refer you to my previous answer, Ross.
ROSS GREENWOOD:
Alright then in that case I'll move you onto another one. I'll move you onto…
KELLY O'DWYER:
OK.
ROSS GREENWOOD:
Because I've got so many of them. I've got Philip Ruddock, father of the House, and he basically said last year that banks have got serious issues to address. Here's what Philip Ruddock has had to say.
PHILIP RUDDOCK:
Look, if we're not able to get to the bottom of these issues in a parliamentary committee process, maybe there has to be a Royal Commission. But I don't think the banks want that.
ROSS GREENWOOD:
"I don't think the banks want that." The banks didn't want it but now the banks do want it. How does that work Kelly?
KELLY O'DWYER:
Well look, you'll have to address that question to the banks but what I would say is that we've had a situation now where people have been calling for a Royal Commission since Bill Shorten was the financial services minister. Let's not forget, under his watch, we saw the collapse of Storm, we saw Trio collapse, we saw Great Southern happen and at the time, the Labor Government said there was absolutely no need for a Royal Commission. They changed their tune in opposition and frankly, I think there are strong political reasons for it…
ROSS GREENWOOD:
Politically pretty clever thing to do you'd have to say, Kelly? As you say now, you respond to the chorus, the chorus has actually got traction and the Government has actually responded.
KELLY O'DWYER:
No, no, but let me give that some context Ross, because we always have to act in Australia's national interest. That is the responsibility of a prudent government and we're a prudent government. Now we conducted a financial system inquiry on coming into government. This was resisted, by the way, by the Labor Party, who said it wasn't necessary. We did it and again it confirmed that we have an internationally recognised system, banking and financial system here, with very strong regulation and oversight. But what has changed is that we have seen the speculation and fearmongering about a bank inquiry reach such a level that it is now going to cause more harm to not do it than to do it to our international reputation. Which is why we have taken the action today to put in place a Royal Commission and to make sure it has got sensible terms of reference, a timeline of 12 months so that it can make recommendations to Government if they're required to make any potential changes to the law. But it will not delay the reforms that we have on foot, reforms to do with whistleblower protections, reforms to do with our one-stop shop for financial complaints, and our superannuation reforms that will see more transparency and accountability for members and their money.
ROSS GREENWOOD:
OK and my final comment, or commentator on all of this, the final question shall we say, is someone I think you'll know this voice, you'll know this name actually. Former Prime Minister John Howard.
JOHN HOWARD:
I would be staggered if the Coalition proposed a banking Royal Commission. That is rank socialism.
ROSS GREENWOOD:
So there you go – rank socialism, Kelly O'Dwyer. Rank socialism. That doesn't help, really shall I say, meld the Government together with those conservative elements of the party.
KELLY O'DWYER:
Well I have the highest regard for John Howard. He was a fabulous Prime Minister…
ROSS GREENWOOD:
He was.
KELLY O'DWYER:
And I'd say to you we have been very clear on why it is that we are doing this and doing this at this time.
ROSS GREENWOOD:
So you'd reject it as being rank socialism?
KELLY O'DWYER:
Well I wouldn't agree with that characterisation. I think the Government has put forward, on advice, some very sensible terms of reference. We received, as I said, advice from the Chair of APRA and the Governor of the Reserve Bank that was clear to the Treasurer that said our international reputation was now being impacted by all of the ongoing speculation.
ROSS GREENWOOD:
Kelly O'Dwyer, thank you so much. To all of our callers and emailers and people who have sent notes in to put to you Kelly O'Dwyer, I thank them very much as well. Good response, we'll talk to you again in the future.
KELLY O'DWYER:
Terrific, thanks Ross.