DAVID SPEERS:
Treasurer Scott Morrison joins me now. Thank you very much for your time.
TREASURER:
Thanks David.
SPEERS:
Now, you have called this a levy, $121 million to boost ASIC's funding and resources. One man's levy is often another man's tax. Is this Scott Morrison's first tax increase?
TREASURER:
The banks are paying to ensure that ASIC has the resources and powers it needs to be a tough cop on the beat. That's what we should be doing and what we're doing as part of a broader reform is to move ASIC to a complete user pays charging model. So, that means all of ASIC's funds will be drawn from the users and those are actually regulated.
SPEERS:
I was going to ask you about that. All of ASIC's funds, now ASIC was funded to the tune of just over $300 million a couple of years ago. Ultimately, all of that funding which is no doubt more than $300 million now, will be paid for by banks.
TREASURER:
That's true.
SPEERS:
Superannuation funds? Insurance companies? Banks?
TREASURER:
That's right.
SPEERS:
Publicly listed companies?
TREASURER:
This is the model we are moving to and this is one of the recommendations that came to us out of the capability review. I need to remind you that the capability review process we initiated last July, we have been taking that process through. Since then it's been coming up through the Budget process, it's been coming up through the cabinet process. This has been going on for some time to get to the point we're at today and these recommendations take us into this next phase for ASIC and I think it's very important because it's ensuring a future proof of its resourcing.
SPEERS:
When will it be entirely user pays?
TREASURER:
In two years, I think.
SPEERS:
So, what happens in the meantime?
TREASURER:
We have additional fees that are coming in early, particularly to deal with this $120 million.
SPEERS:
Is that taxpayer funding?
TREASURER:
There's the existing allocations that are made and then the full funding model kicks in after that as we move...
SPEERS:
So, for the next two years Government funds this increase then banks, super funds, insurance companies and publically listed companies pick up the tab?
TREASURER:
The user pays model kicks in.
SPEERS:
How is it divvied up? Who pays what?
TREASURER:
That's based on the existing charges on a range of services and that will be then remodeled to fit the new demands.
SPEERS:
So, will banks pay more than a super fund or an insurance company?
TREASURER:
It all depends on the size. There are small banks, there are large banks, there are small insurance companies, there are large insurance companies.
SPEERS:
[Inaudible] public capital…
TREASURER:
It's based on the size of the organisation and its involvement in the sectors. Yeah.
SPEERS:
Who collects the money – ASIC or the Tax Office?
TREASURER:
It comes through ultimately to ASIC. ASIC already does quite a lot of user charging right now.
SPEERS:
But who collect that?
TREASURER:
User charging is done through ASIC. That already happens now and that will continue to happen. There are other levies that are in place like through APRA and places like that and they have different collection methodology.
SPEERS:
And how will this one be collected?
TREASURER:
This one is proposed to be done through ASIC.
SPEERS:
Ok, so, they'll collect the money from the people they're policing. There's no problem with that?
TREASURER:
Why would there be a problem with that?
SPEERS:
I'm just asking.
TREASURER:
If you are going to suggest there is a problem, you might want to ask me what it is.
SPEERS:
No, just how the model is going to work. If ASIC is going to take the money and then regulate all of these companies. On the specific measures you've announced to deal with the problems that are there, a product intervention power to enable ASIC to respond to market problems – that will require legislation?
TREASURER:
Yes, that's one of the other measures we've announced today to give greater resourcing both to ASIC and Treasury to ensure that we can fast track a rapid process getting these positions in place.
SPEERS:
Fast track, when will that legislation happen? This side of the election or next term?
TREASURER:
Those resources have only come through today. Now, when you are doing those sorts of things there's multiple drafts. There's lots of consultation, it's not a process of just whipping up a bill overnight and then getting it into the Parliament. So, it will follow its normal process but it does needs considerable resources to do that.
SPEERS:
But this year or next year?
TREASURER:
Certainly this year but at the moment, as we know, we're going to an election on July 2, pending the Governor-General and constitutional issues. I think the Prime Minister has made that fairly clear. We have the Budget sitting week coming up and I am looking forward to that.
SPEERS:
Taking ASIC out of the Public Service Act I understand you're doing this because you want to give them the power to hire more experts in IT, surveillance and banking, no doubt, but does it mean the whole organisation then, they are no longer public servants?
TREASURER:
APRA works on this basis as well. This is important so they can go and recruit the people that they need to be in these roles. It's a fairly sophisticated, very focused organisation that's dealing with particular expertise that is required to do these jobs and you need to get the best people and you don't want to be constrained by bureaucracy that will prevent you from getting those people that you need to ensure that it's the best possible cop on the beat it can be.
SPEERS:
You've announced three further reviews; one into ASICS penalties regime, one into the jurisdiction of the Financial Services Ombudsman and another into the dispute resolution schemes. We just had two rather big reviews. Now, we're going to have three more?
TREASURER:
Well, as I said at the press conference today which you were at, I said the work here never stops. We've had a very significant capability review which has identified a whole range of actions – 34 recommendations, acting on those recommendations now. And there's further work to be done. One of the most important areas of further work to be done is trying to look at whether we can rationalise the existing various complaints, ombudsman, tribunals and these sorts of things and get more of a one-stop shop as Kelly O'Dwyer was saying today. That requires some more work so we'll go and do that work. Policy never stops. You're always seeking to improve things. John Howard used to say 'an ever-receding finishing line' and that's as true in this area as it is in any other.
SPEERS:
Now, you did receive the Murray Financial Service System Review?
TREASURER:
We did. More importantly than that we initiated it.
SPEERS:
You did.
TREASURER:
We called for it in Opposition.
SPEERS:
[Inaudible].
TREASURER:
We had a terms of reference in opposition. I'm told that the Labor Party cannot develop a terms of reference in opposition for a royal commission. Apparently there's some sort of mythical constitutional barrier to them doing this. We produced a terms of reference for the Financial System Inquiry in November 2010. We initiated it when we came into government, we completed the report and we have responded to the report in the ASIC Capability Review has been running in parallel to that to bring this to today.
SPEERS: I just want to talk about the timeline. You received the report back in December 2014, the capability review, I think you received it in December last year and you've announced this response today. Now, honestly, this has nothing to do with Labor in the last couple of weeks talking up a royal commission?
TREASURER:
Unless we had some sort of prophetic capabilities last July that would make us be able to see that Bill Shorten would completely backflip his position on a royal commission that in June he voted against and in April he changed his mind. Now, I don't think we have those powers, David. What we knew was that things needed to be dealt with in ASIC. We initiated that process and what we've been doing for the last few months is we have been taking that through the Budget process. The Budget is in May and there are revenue as well as spending implications of this decision and it was in ERC before Bill Shorten had even decided to backflip.
SPEERS:
Alright, just on the Budget, if I can just quickly. My colleague Paul Murray, as you know, has been reporting this week there are taxpayer funded ads being recorded. He says this weekend, that boast about $16 billion put in to boost the economy through changes to super and multinational tax. Are ads being recorded?
TREASURER:
The Budget is on May 3.
SPEERS:
I am asking about ads though?
TREASURER:
You can ask about ads. What I am saying is the Budget is on May 3. If the Government is going to engage in an information campaign, there is no decision that has been taken on those things. Information campaigns are important if you are making changes in particular areas, then you can inform people of that information and those things that might impact on them. I'll give you an example, remember Julia Gillard ran her carbon tax campaign. She spent $100,000 building three kitchens to run those ads in. Remember they had $7 million that they actually spent during the last election campaign for the no-boat, no visa ads.
SPEERS:
That was bad but you did bag that at the time.
TREASURER:
What we found is that…
SPEERS:
[Inaudible]
TREASURER:
…the Attorney-General and the Special Minister of State actually had to direct the head of the Finance Department to run those ads against his advice. So, I'm not going to take lectures from the Labor Party on those things. The Budget is on May 3. The Budget is going to focus on investment that drives growth, that drives jobs and the details of that of course will be there on that night. The speculation as the Budget tree turns red in Canberra will continue. I have no doubt that we are focused on delivering the budget for growth and jobs.
SPEERS:
Are you committed to getting rid of the deficit levy?
TREASURER:
The deficit levy was legislated to come off after three years. That is the legislation, that was the legislation that we voted for, that was the legislation the Labor Party voted for.
SPEERS:
No extension?
TREASURER:
That's the legislation. We're not changing the legislation.
SPEERS:
Just one other one you did legislate through the House about 500 days ago getting rid of the gold pass for former politicians. There are about to be a whole bunch more former politicians after the election. It hasn't gone to the Senate and yet we're about to hit the end of this term?
TREASURER:
We've had all sorts of problems getting issues through the Senate, as you are aware. There has been quite a back log. They have been quite obstructionist when it comes to these things.
SPEERS:
You ran out of business yesterday.
TREASURER:
We had $13 billion worth of savings which has been blocked and stopped by the Labor Party. The crossbenchers joined them, sure, but the reason, there could be $13 billion more savings that have been passed by parliament and the Labor Party have blocked them. We have put those savings forward, David, and they have been opposed. They have been opposed.
SPEERS:
This one on the gold pass, it's about living within our means.
TREASURER:
This is why we put it forward.
SPEERS:
But in the Senate?
TREASURER:
We had a whole range of measures we tried to get through the Senate and that's where we've got to go to, David.
SPEERS:
Alright, we've got to go. Treasurer Scott Morrison thank you very much for joining us this afternoon.
TREASURER:
Thanks a lot.