LEON BYNER:
Let's welcome the Treasurer Scott Morrison. Thank you for coming on, Minister, good to talk to you.
TREASURER:
Great to be here, Leon, sorry it's been a while.
BYNER:
Now, tell us about these new rules and the question addendum to that first one is; will they apply to those who've given evidence that is most incriminating?
TREASURER:
Well, we need to let the Royal Commission get on and do its work and I'm not prejudging outcomes from that and the Commissioner will make his report when he's completed his work and I've said if he needs more time for that then obviously he'll have the opportunity to do that if that's what he wants. What we've been doing, what we announced today, we actually set in train some time ago, well before the Royal Commission was even established. This started back in October of 2016, you might recall we had the Financial System Inquiry and David Murray did that and he said, "You need to have a very close look at the penalties that exist under the various legislation to these sorts of offences." And we said that we agreed, so we put a group in place and they've been working on that since then and they've given us their report. Cabinet has considered it and here we are with the outcome of that. I think what that demonstrates, Leon, is – we've been working on these issues for years and we've been very aware of the real problems that exist with some of these behaviours which, when they've come out in the Royal Commission, I'm sure people have heard them for the first time and in cases where I've heard them for the first time, I also find them deeply distressing but the work that the Government has been doing has well pre-dated this Royal Commission. It will do its work and we'll see what they recommend as well but we've taken action now, both previously, and right now and we'll continue to into the future.
BYNER:
Okay, now, just before we get to – because I want to know about compensation – I can stress, and you've said this already, that we know that the Royal Commission is not going to get into that space, they'll just deal with what they recommend.
TREASURER:
Correct.
BYNER:
But the public of the country are saying when you've got ordinary people who have been absolutely trodden on by these institutions and, in many cases, their savings wrecked and down to zero, they should be compensated. Well, is there a mechanism to do that?
TREASURER:
I should stress – I mean, take for example that shocking case that we heard of with people being charged for services after they were deceased. Those families have already had compensation paid with interest by the institution that was involved and in many of these cases that's what we're hearing, we're hearing of things that have happened and they're deeply shocking and in many cases they've already either gone through a process and there has been a resolution or there is an ongoing investigation like the issues with the AMP that I mentioned the other day. Now, the broader question is this, Leon, and that is – I mean, taxpayers shouldn't be subsidising the bad behaviour of the banks…
BYNER:
Absolutely not.
TREASURER:
So, any suggestion that somehow taxpayers should put together a sort of a fund here…
BYNER:
No, that's not what I was implying…
TREASURER:
No, but there are some people who think that's what should happen, Leon, and I know you and I aren't in that camp. To the extent that any compensation is paid in relation to any of these matters, that will ultimately be a matter for those institutions to meet that and that will have to follow the normal legal processes.
BYNER:
See, for me, we want a strong banking sector but not on the shoulders of ordinary people who are being destroyed. That's not fair…
TREASURER:
Of course, of course, and I should stress as I did at the press conference today that we've got to separate two important issues here. I can understand and share the view that the behaviour that has had the light shone on it really does lead people to really question the trust they have in people's behaviour in those institutions. But that is a very different matter to whether our banks are strong and whether they are financially stable. All of that is not under question and nothing is being presented, or I believe is likely to be presented, which would question the strength and system integrity of the stability of our financial system. Now, that's critically important because that underpins everybody's job in the country and we've got to be careful not to allow one to cross-contaminate the other but on the behaviour issue, on the behaviour issue, there are already laws that deal with this sort of behaviour…
BYNER:
I was going to ask you that. So, those laws are fairly strict, are they not?
TREASURER:
They are but they're going to be a lot stricter now and the other day, when I made the mention about jail time – now, whether jail time potentially would be the penalty handed down in that particular case would be a matter for courts. I wasn't seeking to play bush lawyer on that, I was just drawing attention to the fact that these are not victimless crimes. They're not – sometimes, when it comes to corporation's law, people think, "you know, that's just stuff that goes on in business and no one really gets hurt by that." Well, no, thousands of people get hurt by this and it's a crime and what we're doing today is saying, "we believe it's a crime and the punishment must fit the crime." And that should send a clear values signal into all of these organisations saying, "you do this and expect to face the consequences."
BYNER:
Let's say you've got a financial institution, surely the board of that institution should take some responsibility.
TREASURER:
I absolutely agree, Leon. I mean, yes, today Craig Meller has stood down at AMP, he's stood down taking a sort of general responsibility for things that have happened inside of that organisation and CEO's do bear that responsibility. But boards oversee the culture, values and governance of these institutions and I certainly don't have the view that they should get leave passes on these things, I think they're there, they're paid to do a job. Some of them are paid quite handsomely. Some of these institutions' Chairs are paid $1 million a year. Now, I'm not saying they should or shouldn't be, I'm simply saying that they hold the highest level of responsibility.
BYNER:
Alright, so in a nutshell, what, Scott Morrison, will be the difference between the rules that currently apply, which I thought were rigorous already, that are going to change? What's the essential difference?
TREASURER:
Let me go through them. First of all, five years was there before, it's now ten years for the most serious offences. And individual fines, $945,000, for corporations, the larger of $9.5 million or 10 per cent of the annual turnover of these organisations and we're talking about hundreds of millions there. So, these are very severe and stiff penalties that would apply in the most extreme of cases, but it was the product of what David Murray said and that is you've got to get these penalties commensurate with what's happening elsewhere around the world and commensurate with the very serious nature of these offences and we've done that and we just didn't do it overnight. It's not like we saw what happened in the Royal Commission two days ago and Kelly and I said, "let's get together and knock this out." We knew this was a problem and have been working on it for some period of time, we've gone through a careful process, we don't rush into these things, we don't enter into these sorts of things lightly and I think it's important that we continue to take that approach going forward.
BYNER:
Just one quick question.
TREASURER:
Sure.
BYNER:
These fines, if they're imposed, which are substantial, who gets that money?
TREASURER:
That goes to the Commonwealth.
BYNER:
Okay, so I, like you, don't want taxpayers…
TREASURER:
Like any fine.
BYNER:
Yeah, but I, like you, don't want taxpayers to fess up for this so the banks damn well need to compensate these people because if they don't, the public will never forgive them.
TREASURER:
You make a very good point. Now, there are many things the Government can do – we've increased the powers and resources of ASIC, I understood you had one of the Greens' senators on this morning – we've put an extra $127 million into ASIC. That's what we did so don't trust the Greens when it comes to talking about money. The second point I'd make is that the culture and values of these organisations – they've got to change that themselves and they've got to rebuild trust with the Australian public and they need to take these steps, whatever it takes, to ensure that they can rebuild the confidence of their customers and the Australian public and that is desperately important and at the same time, we need to sort of reassure people about the broader stability of the banking and financial system, there are no issues there. But at the same time, we can't give leave passes – whether it's on the penalties that are there or allow excuses to be made for behaviour which is, just frankly, not on.
BYNER:
Scott Morrison, thanks for joining us.
TREASURER:
Thanks a lot, Leon.