KIM LANDERS:
What warning did the bosses of the Reserve Bank and APRA give you that convinced you a Royal Commission was the only option?
TREASURER:
Well when I consulted them the other evening, what had become apparent was that all the politicking and the great risk of a Commission of Inquiry that was going into any possible direction. I mean basically the Labor Party were imputing into the process in the Senate and their key negotiator was Sam Dastyari…
LANDERS:
But specific I’m asking…
TREASURER:
I know and I’m getting to it. What was discussed was that all of that politicking was causing damage to the credibility and certainty that was needed in our financial system. Now everybody’s job, everybody’s mortgage, every loan to every business in the country depends on the strength and credibility of our financial system. That was being put at risk because of the politicking and we had to go for the least worst option, which is the option that we took, which takes the matter into control, ensures there is some certainty and some focus and some discipline to the enquiry that will now be held, and the Government is in a position to do that only though this process to leave it to the continued whims of the politics in the Senate would have damaged our economy and we were not prepared to allow that to happen.
LANDERS:
It was National Party MPs and Senators who were agitating in recent days for an inquiry, so was it them who were jeopardising the reputation of the banks and our financial system?
TREASURER:
At the end of the day it’s the Labor Party who are the ones that started the politicking on this and created the environment for this to occur.
LANDERS:
But the National Party MPs, you had people like George Christensen set up a website calling for a Royal Commission, Barry O’Sullivan who wanted to introduce that private members Bill, were they playing political football?
TREASURER:
I’ll let others make commentary on that, what we…
LANDERS:
I’m asking you Treasurer.
TREASURER:
Well, I’m not making a comment on it. What I’m simply saying is we had to deal with the maths in the Parliament, and the maths in the Parliament was going to lead to an unwieldly and directionless and haphazard Commission of Inquiry which would have done far greater damage and that was not something that we believed should be allowed to happen and that was the nature of my discussion with the Reserve Bank Governor, Phil Lowe, and well as Wayne Byres, the Chair of APRA. That confirmed the concerns that were being raised out of the banking sector itself. And the national economic interest dictated that the Government would have to take a different course.
LANDERS:
Do you concede though that National Party MPs and Senators forced the Government’s hand?
TREASURER:
No I don’t. What forced, at the end of the day, the need to take what we’ve described rightly, is a regrettable but necessary action was the national economic interest. That’s what I’ve been focused on, and that’s what I and the Prime Minister have acted on.
LANDERS:
Will a win for Barnaby Joyce in tomorrow’s New England by-election help pull those National Party agitators back in line?
TREASURER:
What it will do is confirm the Turnbull Government. That’s exactly what it will do. And it will be a rejection of Bill Shorten and his dark vision for Australia’s economy.
LANDERS:
The New South Wales Deputy Premier, the leader of the Nationals in New South Wales, John Barilaro, says that the Prime Minister could give everybody a Christmas present and simply quit.
TREASURER:
I reject that absolutely and I find that a very unhelpful comment.
LANDERS:
His leadership is solid?
TREASURER:
Absolutely, the only person who failed the test of leadership this week was Bill Shorten who allowed Sam Dastyari, who has been caught cheating on his country, to keep him in the Labor Party, now that is…
LANDERS:
If I could just turn back to the Royal Commission…
TREASURER:
You asked me about leadership, Bill Shorten’s leadership has failed because he’s kept a cheater on our country in the Parliament.
LANDERS:
Can I ask you about the Royal Commission, can I turn back to that. Do you believe there’s been fraudulent or criminal behaviour by the banks?
TREASURER:
This is what the Royal Commission will look into…
LANDERS:
But do you believe it?
TREASURER:
That’s not for me to make a judgement on. That’s why you have a Royal Commission and that’s why you’ve had the umpteen other inquiries, parliamentary and otherwise, into these issues. There’s a range of these issues being pursued. Some of these matters are already before the courts, you’re aware of the AUSTRAC matter, you’re away of the Laker Inquiry from APRA which is currently going on with CBA. The banks have been in court over the bank bill swap rate issue with ASIC. There’s been a lot of action. When we had the Financial System Inquiry, which we initiated in Government and have now responded to, which has addressed all of the broader financial systems issues, and particularly the strength of our prudential regulation, which I note the Shadow Treasurer, Chris Bowen is calling into questions today. I mean I think that’s reckless. Taking advice from the Labor Party on economic policy is like asking a drunk driver to give you driving lessons.
LANDERS:
This Royal Commission will also look at industry superannuation funds. When was it decided to include that?
TREASURER:
As we framed the terms of reference.
LANDERS:
So, just in the last couple of days?
TREASURER:
Well, it’s a matter we’ve had some concerns about, and the opportunity was there to ensure that we had a broad ranging inquiry into the financial services sector and that includes, of course, superannuation, why would you leave them out?
LANDERS:
The chairman of Industry Super, the former Liberal MP Peter Collins, believes it’s an ideological pursuit against industry super funds.
TREASURER:
I think he’s wrong and overreacting.
LANDERS:
Is there a risk that it will divert the Commission’s attention from the financial scandals and banking bad behaviour?
TREASURER:
No.
LANDERS:
You’re absolutely confident of that?
TREASURER:
Yes.
LANDERS:
As I understand it the terms of reference do need legislation though…
TREASURER:
No.
LANDERS:
They won’t need any legislation?
TREASURER:
No. that’s what a Royal Commission does. It’s an action of the executive government which is why this was the action we had to take, because we weren’t going to allow this to become a political circus, where in the Senate you had, and I’m not kidding, Sam Dastyari was the Labor Party negotiator on the Barry O’Sullivan Bill. Seriously, that’s what was happening. That’s the circus we were going to get.
LANDERS:
On this issue of superannuation funds though, if the Inquiry is looking at industry superannuation funds, do you see this as an opportunity to, are you hoping the inquiry might come up with some terms, some recommendations, to reduce those often union dominated boards?
TREASURER:
I’ll leave that to the Commissioner.
LANDERS:
Did you consult with any consumer groups about the draft terms of reference to this Inquiry?
TREASURER:
We have a draft terms of reference which has been built on the umpteen inquiries, particularly the work that has been done by Kate Carnell, the Small Business Ombudsmen who’s been working on this issue, the House of Representatives Inquiry which has been working with all of these groups, the Parliamentary Joint Standing Committee Inquiry which consulted widely with industry groups. So, there’s no shortage of background here to move quickly and swiftly, as we have, to draft these terms of reference. The Labor Party has been saying they want one of these for 18 months, two, three years and they still haven’t produced the terms of reference. So, how can you consult with someone who has no clue what it should be?
LANDERS:
Final question, have you got someone to lead the Royal Commission?
TREASURER:
We have someone in mind but I’ll leave that to…
LANDERS:
When will you tell us?
TREASURER:
When we’re in a position to do so.
LANDERS:
Treasurer Scott Morrison thank you very much for speaking with AM.
TREASURER:
Thank you very much.