|
representatives vote 2018-11-28#2
Edited by
mackay staff
on
2018-12-29 12:07:28
|
Title
Bills — Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018; Consideration in Detail- Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018 - Consideration in Detail - Removing cap on civil penalties
Description
<p class="speaker">Clare O'Neil</p><p>by leave—I move amendments (1) and (4) on sheet 1 as circulated in my name together:</p><p class="italic">(1) Schedule 1, item 117, page 54 (lines 17 to 24), omit paragraph 1317G(4) (c), substitute:</p>- The majority voted against [opposition amendments](https://www.openaustralia.org.au/debate/?id=2018-11-28.124.2), which means they failed. The amendments related to the cap the Government is placing on civil penalties, which the Opposition oppose because, according to Labor MP [Clare O'Neil](https://theyvoteforyou.org.au/people/representatives/hotham/clare_o'neil):
- > "*it's very out of step with other pecuniary penalties handed down in Australia and overseas. It is out of step with the contemporary reality of financial service providers and banks, and it creates a regime that's not effectively futureproofed as our financial institutions continue to grow in size.*
- > *I want to note that the Consumer Action Law Centre was very strong on this point when they made a submission to the ASIC enforcement reviews processes. I'm going to quote a little bit from their submission. They said, 'We are not convinced that theirs is a strong policy justification for introducing a maximum limit on civil penalties of one million penalty units, that's currently $210 million. Setting a maximum does not recognise that there are large differences in size of banks, insurers and superannuation funds and that a penalty in excess of this amount may be appropriate in the context of very large corporations.'*"
- ### What is this bill about?
- The [bill](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/r6213) was introduced to "*introduce a stronger penalty framework for corporate and financial sector misconduct*". It was introduced in response to recommendations made by the [ASIC Enforcement Review Taskforce report](https://treasury.gov.au/review/asic-enforcement-review/).
<p class="italic">(c) 10% of the annual turnover of the body corporate for the 12 month period ending at the end of the month in which the body corporate contravened, or began to contravene, the civil penalty provision.</p><p class="italic"> <i>[removing cap on civil penalties]</i></p><p class="italic">(2) Schedule 2, item 8, page 97 (lines 19 to 26), omit paragraph 12GBCA(2) (c), substitute:</p><p class="italic">(c) 10% of the annual turnover of the body corporate for the 12 month period ending at the end of the month in which the body corporate contravened, or began to contravene, the civil penalty provision.</p><p class="italic"> <i>[removing cap on civil penalties]</i></p><p class="italic">(3) Schedule 3, item 7, page 128 (lines 22 to 29), omit paragraph 167B(2) (c), substitute:</p><p class="italic">(c) 10% of the annual turnover of the body corporate for the 12 month period ending at the end of the month in which the body corporate contravened, or began to contravene, the civil penalty provision.</p><p class="italic"> <i>[removing cap on civil penalties]</i></p><p class="italic">(4) Schedule 4, item 4, page 166 (lines 19 to 26), omit paragraph 75D(2) (c), substitute:</p><p class="italic">(c) 10% of the annual turnover of the body corporate for the 12 month period ending at the end of the month in which the body corporate contravened, or began to contravene, the civil penalty provision.</p><p class="italic"> <i>[removing cap on civil penalties]</i></p><p>Labor is moving two amendments to this bill which will be moved and voted on separately, but for the purposes of having a constructive debate in the chamber I think some of the speakers will refer to both amendments as we discuss, so we can have two divisions at the end. For the convenience of the House I want to outline in broad terms what both of those amendments cover. Then other members can refer to both in their contributions.</p><p>The first amendment that Labor is moving for this bill is to remove the cap of one million penalty units from the 10 per cent of turnover limb in the new civil penalties regime created by the bill. The second amendment that I will move shortly will increase the maximum penalties for the most serious corporate crimes that are described in the bill from 10 years, as it has been drafted, to 15 years. The crimes that have been essentially defined as the most serious are those that involve dishonesty and fraud. The ASIC Enforcement Review Taskforce has agreed, and adopted essentially, that these are of that description.</p><p>I will return to the first amendment, which is the removal of the one million penalty units cap in the 10 per cent of turnover limb in the new civil penalties regime. It's quite a mouthful but a very important part of what will become law very shortly. For reasons that aren't clear to Labor, the government has decided to effectively undermine the fairness of the cap on civil penalties of 10 per cent of turnover, by effectively reducing the exposure of larger institutions. I want to be really clear, firstly, that Labor supports the 10 per cent of turnover limit for penalties. We don't support the additional restriction of one million penalties cap in the bill. This amendment is so important to Labor because it's very out of step with other pecuniary penalties handed down in Australia and overseas. It is out of step with the contemporary reality of financial service providers and banks, and it creates a regime that's not effectively futureproofed as our financial institutions continue to grow in size.</p><p>I want to note that the Consumer Action Law Centre was very strong on this point when they made a submission to the ASIC enforcement reviews processes. I'm going to quote a little bit from their submission. They said, 'We are not convinced that theirs is a strong policy justification for introducing a maximum limit on civil penalties of one million penalty units, that's currently $210 million. Setting a maximum does not recognise that there are large differences in size of banks, insurers and superannuation funds and that a penalty in excess of this amount may be appropriate in the context of very large corporations.'</p><p>I'll finish the quote there, because I want to talk in really plain English about what the government is proposing and how that differs from Labor. This bill is really coming out of an enforcement review that was done prior to the royal commission. What the royal commission has shown us, if there's any one thing, is that the current framework for criminal law and civil law—indeed, for corporate malfeasance and its enforcement—is not working to deter the types of crimes that we're so concerned about in this chamber. Setting a limit of $210 million in fines, which is effectively what the government is doing here by imposing a cap, is really saying that an institution that could be many billions of dollars in turnover is going to have its fines restricted in a way that wouldn't happen to a smaller company. I think if you sat down with Australians and talked to them about this they would see that it's very consistent with the approach to penalising criminal wrongdoing that we've seen on the other side of the chamber. We know this is a government that voted 26 times against a royal commission. The Prime Minister, who sits opposite us in the chamber, voted 26 times. He called it a 'populist whinge'. Here we again have the government seeking to curtail the ability of courts to give appropriate sized penalties for incredibly serious wrongdoing.</p><p>We on this side of the chamber have a very different approach to corporate wrongdoing. I don't think it matters if you break the law and you're wearing a suit or you're not wearing a suit. When you break the law, you break the law, and you need to be punished appropriately. So the amendments Labor is moving will strengthen this bill, we believe, in important ways. They're thoughtful amendments that we have consulted on with a variety of bodies. I'll be pleased to see the House vote and support them.</p> <p class="speaker">Stuart Robert</p><p>Let me thank the shadow minister opposite for her goodwill in seeking to punish those who would do wrong. The bill we've put forward, the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018, seeks to raise penalties across a range of areas of the corporations law, covering a range of areas of offence: everything from AFSL through to misrepresentation and failure to put forward the best interests of consumers. We have consulted widely across all jurisdictions, states and territories to bring alignment of the penalties regime. In many instances, penalties have doubled. Some have increased three times. Some have increased five times. We're talking penalties that have increased to up to 10 years. We've looked at areas of recompense, including where recompense would have to happen up to three times in dollar terms.</p><p>The penalties we've put forward are strong, are significant and are designed to be a deterrent. This debate cannot be allowed to be a race to the bottom on who can be tougher, because that's not what this should be about. This shouldn't be about who is the strongest when it comes to penalty regimes. To take penalties 500 per cent forward, up to 10 years, sends a message that this government will not abide by those who seek to do wrong by their fellow Australians. Now, I will take it at face value that those opposite are coming at this with goodwill, that those opposite are seeking to back us in bringing penalties forward. But goodwill starts to get interesting when those opposite are saying that we need a 700 per cent increase in penalties because 500 per cent is not sufficient. That starts to look a bit like a stunt to say they're tougher than the government.</p><p>So let's be clear about what the government is seeking to do here. We are seeking a stronger penalty framework to ensure that consumers are protected from misconduct. Under this legislation, the imprisonment penalties for some of the most serious criminal offences under the Corporations Act are being increased substantially. Criminal penalties are being increased fourfold. Perhaps in a different environment those opposite would criticise us for being too harsh or too strong, but a fourfold increase apparently is not strong enough for those opposite. Let's be serious about what's happening here. These are significant penalties. This is not a race to see who can be the toughest or the hardest. This is about sensible regulation and harmonisation across laws, jurisdictions, states and territories.</p><p>Under these reforms, the maximum civil penalty for individuals will increase from $200,000 to be the greater of $1 million or five times or three times the benefit gained. I can't think of a single time in modern political history where a government has moved forward with a strengthening of a penalty regime anything like this. That those opposite think that a 500 per cent increase on civil penalties and a 400 per cent increase on criminal penalties somehow isn't enough—</p> <p class="speaker">Clare O'Neil</p><p>It's not enough!</p> <p class="speaker">Stuart Robert</p><p>It's not enough, the shadow minister says, demonstrating that those opposite are now the big, tough cops on the beat. I would take those opposite a little more seriously if, in August 2013, the now Leader of the Opposition was not on the record saying how marvellous our financial services were—34 days before those opposite lost. That, apparently, our 400 per cent and 500 per cent increases for penalties aren't enough is simply a joke. It's a stunt, and frankly those opposite should be ashamed of themselves for seeking to make light of this and to score political points on this particular issue.</p> <p class="speaker">Adam Bandt</p><p>I rise to support the amendments and to make a few brief comments. When the matter comes to the other place, Senator Peter Whish-Wilson, who has had carriage of this for us for quite some time now, will be making some further comments. In rising to speak in support of the amendments and some of the measures taken in respect of the Treasury Laws Amendment (Strengthening Corporate and Financial Sector Penalties) Bill 2018, I do want to note that a pattern emerges in this place. In many instances, the Greens put forward a proposal, it's initially ignored by the others, then it's ridiculed, then they fight against it and then they adopt it. That has been the case here as well. We took a very comprehensive policy to the last election, much of which we are now finding reflected in the bills and amendments before the House. We think it's no surprise that our election policy with respect to penalties and with respect to the criminal offences—we wanted penalties to be included with reference of three times the benefit gained, and all of a sudden we find a very similar measure included in the bill. We argued for increasing the range of administrative penalties that were available to regulators so that they could more easily penalise those who have done wrong, including having on-the-spot fines available for smaller offences. Lo and behold, that's also what we find in the bill. When going to the election, we also proposed making it easier for regulators to pursue the recovery of ill-gotten gains, through the introduction of a disgorgement power, and now we have relinquishment orders popping up in this bill.</p><p>So, the pattern here is very similar to what we saw with the banking royal commission, where we pushed and pushed in the teeth of opposition from Liberal and Labor. Eventually Labor came on board and others came on board and then finally the government had to relent. Now we find the government coming up with a bill that suggests that someone within the minister's office didn't necessarily have many great ideas of their own and decided to spend a lot of time reading Greens election policy and turning some of that into bits in the legislation.</p><p>This is a bill that can be improved and for that reason we support the amendments and we support the opposition in moving them. We will have more to say about this if the bill proceeds to the Senate.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>
|