SALES:
Treasurer thank you for coming in.
TREASURER:
Thanks Leigh.
SALES:
Is it fair to say that the only reason the coalition has moved on this is because Labor forced your hand?
TREASURER:
Of course not. I mean, we initiated the ASIC capability review last July. Now at that time, the opposition was opposed to a Royal Commission and had just voted against one in the Senate, only the month before. What this ASIC capability review has done is worked in parallel with the Financial Systems Enquiry which we first proposed in opposition with a terms of reference back in 2010, we implemented when we came to government and we've responded to it, and we are now following through with the ASIC capability review through our normal budget process. I mean this was in the budget process before Bill Shorten even flip-flopped on an issue of a royal commission.
SALES:
None-the-less whenever you initiated things, the perception now is that they made their announcement first about a royal commission and you've now followed up with this.
TREASURER:
Well that perception is incorrect because that announcement by the Leader of the Opposition which was a complete reversal of his previous position up until just March of this year, that actually followed the Prime Minister going to Westpac as we know, raising the very serious issues around culture directly with the banks themselves.
SALES:
We've had at least nine banking scandals since 2008 destroying the life savings of tens-of-thousands of Australians. ASIC, APRA, the Reserve Bank have all in recent months criticised the banking industry. Coalition MPs have told the party room they're unhappy with the banks. Some of your own MPs support the idea of a royal commission, every year the financial services ombudsman receives 30,000 complaints and the superannuation complaints tribunal receives 15,000. On what planet does that not pass the bar for the royal commission?
TREASURER:
What it passes the bar doing is taking the immediate action that is necessary to ensure that there is a resolution of these issues and there is stronger powers and more resources given to ASIC which is stronger than a royal commission to actually move forward on these matters. These are very serious issues there's no doubt about that. That's why we have been perusing them for so long, with methodical, careful disciplined policy work that has resulted in the decision we're at today. We don't think the answer is to wait another two years, to spend another $50 plus million of taxpayer's money to resolve this. We think the banks should pay an extra $121 million now to boost the powers and capabilities of ASIC to ensure that consumers are better protected, and ensure that the greater integrity of our banking and financial system on which so many jobs depend.
SALES:
But then why say on trade unions was it not just enough to reinstate the ABCC, because you did a royal commission there?
TREASURER:
Well I'll quote Bernie Fraser, it was Bernie Fraser who said look we know what the issues are here. The important thing is getting on with it. That's what he basically said. On the issues you've referred to there were many matters that needed to be investigated and in-fact the recommendation of restoring the Australian Building and Construction Commission was something that the opposition, despite a royal commission, has just voted against today. So I don't see how the opposition can claim to expect the findings of royal commissions and be calling for them, when only just this past week they voted against a recommendation of one, just this week.
SALES:
You said on an interview in March the 22nd that of the construction sector and defending the Royal Commission. It employs about 8 per cent of Australians and it accounts for a significant proportion of our GDP. It is important that the sector is firing on all cylinders and isn't held back by the sorts of practises that have been identified by the Royal Commission. The financial services sector is closer to about 10 per cent of the GDP so again I ask why is that not worthy of a royal commission?
TREASURER:
Because it doesn't get the response that we need now Leigh. What Bill Shorten has done, he doesn't have a policy, he has said banking and royal commission in the one phrase and thinks that is a policy. He has no terms of reference; his members can't even make up their mind what it is supposed to be focused on – some say it needs to look at tax issues others say it doesn't. What we have done today which has been at the end of a very long process is ensured that we have boosted the powers of the cop on the beat to deal with the issues now. People who are coming up and raising these issues they have genuine concerns but their concerns are not going to be alleviated by what I would describe as a cynical exploitation of peoples genuine concerns and the politicisation of their pain by Bill Shorten. The only person who will benefit by this proposal for a royal commission is Bill Shorten. Not the people he says will benefit from it.
SALES:
Let me come at this from an entirely different way. You are a Liberal government therefore your first principle is meant to be small government and free markets. Yet you are introducing an additional regulatory burden and cost on to the banks. How do you square those two things?
TREASURER:
Well in the same way that John Howard and Peter Costello did. It was their regulation of our banking and financial systems when they were in government, the systems that they put in place which was the primary reason why our banks were the ones that didn't fall over during the global financial crisis.
SALES:
It's not small government though is it?
TREASURER:
Well what it is is prudent and effective regulation and that is not inconsistent with the idea of supporting markets and smaller government. Regulation is important but you don't excessively regulate. What we have been careful to do is ensure our regulation has been prudent and targeted. What we are doing here is we are saying the banks will pay for this increased resource and over the next two years we will get to full funding of ASIC under a user pays model so we will have a future proof funding for this tough cop on the beat. To make it tougher with this special prosecutor who will be appointed as a commissioner in to ASIC to particularly follow up on these issues.
SALES:
Just finally, before we run out of time, a broader question. The opinion polls are neck and neck; the Prime Minister has taken this risky move this week and basically locked into a July 2nd election. Your Budget is the springboard into it - your first Budget. Are you feeling the pressure?
TREASURER:
The Budget is an economic plan to ensure that we provide for growth and jobs to drive this transition that is occurring in our economy. Australian's know our economy is transitioning and they know there are great risks and threats to it. This budget is the economic plan that will support that growth, that supports those jobs by backing in the investment that is needed to make it happen.
SALES:
And your whole government's future basically hinges on it?
TREASURER:
Well Budgets always have pressure on them Leigh. That doesn't faze me. What fazes me and keeps me focused is ensuring that we are doing what is right for the Australian economy, what is right for growth and what is right for jobs. We don't think Bill Shorten's plan to put $100 billion additional tax burden on the Australian economy is a plan for jobs and growth – it is not a plan for jobs and growth.
SALES:
Treasurer I will see you on Budget night in a couple of weeks.
TREASURER:
See you then Leigh.