Thursday, 24 November 2011
Corporations (Fees) Amendment Bill 2011; Second Reading
This government is so bad and so incompetent that even when they do something that is right in principle they still manage to find a way to stuff it up. This government knows how to do the wrong thing when they are trying to do the right thing. This government knows how to stuff something up that really should not be a problem—something that should be quite right by going through proper process. The Corporations (Fees) Amendment Bill 2011 is about allowing ASIC to levy cost recovery fees on participants in licensed financial markets in its role as a market supervisor. Currently ASIC levies these fees on market operators such as ASX.
The coalition supports the principle of cost recovery that the bill seeks to introduce, but the government have got the process completely wrong. They always get the process wrong, and whenever they get the process wrong they end up in a situation that is a complete stuff-up and that puts people on the wrong side of bad public policy. We have seen it with the carbon tax, we have seen it with the mining tax and we see it with this bill. With the mining tax there was no consultation whatsoever and of course it ended up in tears, and because it ended up in tears the government had to come up with secret deal after secret deal after secret deal, covering up everything else they were doing in order to hide the consequences of their incompetence.
On this occasion the government wants the Senate to pass this bill without actually knowing what the government is going to do in practice. The government wants to impose cost recovery on all market participants, but it does not want to tell us how it will go about it. There is no detail whatsoever. The government clearly is putting the cart before the horse. We are very concerned that much of the detail required to implement the objectives of this bill will be contained in regulations that are yet to be drafted. It should be noted that only after the bill was first introduced did Treasury issue a consultation paper on the design of an appropriate fee structure. The deadline for the Treasury consultation was 23 September 2011. To this day we do not know what the detail is going to be of the fee structure that the government intends to impose on stockbrokers and on all the other market participants that will have to pay these fees.
So the government wants the Senate to give it a blank cheque. Quite frankly, given the terrible track record of this government, given the demonstrated track record of incompetence, the Senate should be very, very sceptical about giving this bad government a blank cheque. Whatever this government has touched has turned to mud. That is exactly why the opposition will be moving an amendment to defer this bill until after the government has tabled the associated regulations. We do not trust this government. The people across Australia do not trust this government. This is a government that has a track record of broken promises, of incompetence, of bad decisions. So we want to see the detail before we are prepared to pass this legislation.
This is a view that is echoed by a lot of market participants in the context of the recent House of Representatives Standing Committee on Economics inquiry. Mrs Mitchell from RBS Morgans said:
… the timing of the bill was unusual, given there was so much still to be settled.
We suggest that a consultation process should see its natural course before this bill is passed.
That is proper process 101, but this bad, incompetent Gillard Labor-Green government would not know proper process if it fell over it. Whatever this government does is bad process. Remember the secret deal with the three biggest miners in the Prime Minister's office, excluding all of their competitors, doing a dirty little deal behind closed doors, giving them a competitive advantage and making it harder for smaller local miners to compete with them? That is the modus operandi of this corrupt government. This government does not go through proper process, and of course it is people across Australia who invariably have to pay the price for it.
Here we go again. The government wants this parliament to give it a blank cheque. Here is a government that wants the Senate to pass the bill and says: 'Trust us—we're from the government. We'll sort out the detail later.' We should not trust this government, because this government has not given us any reason whatsoever to trust it. Again and again it has deceived the Senate and it has deceived the Australian people. The government always struggles to get the detail right, which is why we should be so careful about passing legislation like this until we have seen the detail. Coalition members of the economics committee raised a series of issues with this proposal, with this bill, which must be addressed before this legislation is dealt with. There needs to be proper checks and balances in place to ensure that the fees imposed will actually be for cost recovery only.
We know that this is a government that is very wasteful. We know that this is a government that is addicted to spending. We know that this is a government that is always casting around for more cash. We know that this is a government that has introduced 19 new or increased taxes—ad hoc tax grab after ad hoc tax grab. We know that this is a government that comes up with new multibillion-dollar tax grabs and spends more money than it expects to collect from that tax before it has even started collecting it. So we know that this government does not know how to manage money. We know this government does not know how to live within its means. We know that this government has delivered four successive deficit budgets. We know that the Labor Party has not delivered a surplus budget in more than 20 years.
People across Australia know that every time the Labor Party gets hold of the treasury bench it stuffs up the Australian budget. People across Australia know that every time the Labor Party has a period in government the coalition has got to come back and fix it up. People across Australia know that the Labor Party talks about surplus budgets. People across Australia know that the Labor Party is long on rhetoric but short on delivery when it comes to sound fiscal management. So, when it comes to a bill like this, which is about imposing cost recovery, and the government is not prepared to give us the detail on how it proposes that that cost recovery will operate in practice, we are naturally suspicious. We are naturally suspicious because we have a job to do for the Australian people. We have to scrutinise what this government does, because this government invariably has its hands in the pockets of people across Australia. It is a government that has its hands in the pockets of businesses across Australia, and it is going to have its hands in the pockets of every single stockbroker across Australia. That is okay; we accept the principle of cost recovery, but it has to be done right, it has to be done fairly and it has to be done in a way that we can properly scrutinise before it is to proceed.
There need to be effective governance and accountability arrangements in place to ensure that cost recovery measures are contained over the long term. There has to be some discipline around this because—I say it again—this is a government that is addicted to spending. This is a government that has a track record of waste and mismanagement. This Labor Gillard government has a track record of spending more than it raises. This is a government that does not know how to live within its means. So, if you give this government what effectively is a blank cheque, of course there is potential for very serious consequences.
Furthermore, consideration should be given to the cumulative effect that the multiplicity of new regulation is having on the efficiency of Australia's financial markets. As well as being a high-spending and high-taxing government, this is also a government that continues to push more and more and more red tape on Australian business. It continues to impose more red tape, making business and the Australian economy less efficient and less productive. This government really can be summed up in the description that Ronald Reagan once made of economic policy by government: if it moves, tax it; if it keeps moving, regulate it; and, if it stops moving, subsidise it. That is what this government is all about: if it moves, tax it; if it keeps moving, regulate it; and, if it stops moving, subsidise it. That is the economic policy of this Labor Gillard government. Of course, that is not the way things should be happening in Australia.
This bill proposes to change the chargeable matters in the Corporations (Fees) Act 2001 to allow ASIC to impose cost recovery fees on Australian licensed market participants. Currently ASIC levies these fees only on market operators—that is, ASX, as the sole operator. The bill will allow ASIC to spread these fees across market operators and market participants such as stockbrokers and derivative traders. Following the decision to allow competition in the market for trading in listed shares, the government in the 2011-12 budget provided funding to ASIC to develop market integrity rules and a regulatory framework for the new competitive market. This funding was conditional on it being cost recovered from industry, and the total funding allocated to ASIC for this project was about $30 million over five years. ASIC subsequently developed market integrity rules which will come into effect on 31 October 2011. On 4 May 2011, Chi-X was granted an operating licence as an additional market operator in competition with ASX, but as yet the structure of the fees has not been determined.
That is the whole point that the coalition wishes to make today. We should not be asked to pass judgment on this legislation until we have seen the detail of how it is expected to operate, because this is a significant shift in the way cost recovery is to operate in Australia when it comes to the licensed financial markets. As such, we should be given an indication of how this is to operate before we are asked to pass judgment. The fact that Treasury only issued a discussion paper asking people for their views on how this should operate after the legislation was introduced shows you that this government does not really know how to follow proper process in sequence. This is what gets this government in trouble again and again, and this is what gets the Australian people in trouble, because a bad government makes bad decisions and imposes unfairness and inequity because it has not gone through a proper, open, transparent and inclusive process in the course of its decision making.
Over the last four years, we have seen that again and again. We have seen the government cut corners. We have seen the government rush to make announcements because it is desperate for more cash. Because this government has been the worst spending government in the history of Australia, because this government has delivered the biggest deficit on record in the history of the whole Commonwealth for the last 110 years and because this government for ever and ever comes up with one new spending decision after the other—it makes all these promises which sound good on the surface but are not funded—the government has to come up with one new tax and revenue measure after the other.
We were promised a few years ago by the former Prime Minister Mr Rudd a comprehensive root-and-branch reform of our tax system—a once-in-a-generation opportunity for a root-and-branch reform of our tax system. We were promised a reform that would make our tax system simpler and fairer. But of course all we have had from this government is one lazy, ad hoc tax grab after the other. That is why, whenever the government comes into this parliament with a proposition to raise more cash, this parliament has a responsibility to scrutinise very carefully what the government is up to.
On this occasion, the government does not want to tell us what it is up to. It wants to say to us, the parliament, to us, the Senate, representing people from across Australia: 'Just trust us. We are the Gillard government. We know what we're doing. Just give us a blank cheque.' Well, that is not the way the Senate should operate, in particular on this occasion, because we have a terrible government. We have a terribly incompetent government. We have a government with a track record of failure, broken promises and incompetence. There is absolutely no way that the Senate should pass a bill like this without knowing what is actually going to be in the detail. That is why, on behalf of the coalition, I will be moving an amendment to the second reading. It will be:
That further consideration of the bill be an order of the day for the third sitting day after the government publicly releases a final draft of the regulations dealing with the proposed financial market supervision cost recovery arrangements.
I would have thought that was an eminently sensible amendment. A government that was not in a desperate rush for more cash to cover up its many black holes and areas of wasteful spending would have the time to go through proper process. But not this government. This government cannot go through proper process. This government cannot wait until it has done its homework because this government needs to get this legislation through as quickly as possible so that it can start collecting the cash. That is exactly what the government did in the context of the mining tax. It did a dirty little deal, negotiated exclusively and in secret with the three biggest multinational, multicommodity miners and excluding all of their competitors. It did a deal in which those three big miners who were sitting around the table would end up not paying any tax, which puts a very serious question mark on the revenue estimates that the government has published in its budget papers.
When we asked for the underlying assumptions, the government said to us: 'Don't you worry. We are not going to give you those. You know why? They are commercial in confidence. We can't possibly give you the assumptions underlying the mining tax revenue estimates because they are commercial in confidence. Do you know why? They were provided to us by BHP, Rio and Xstrata. So the three miners that designed the mining tax are the ones who gave us the assumptions that helped us estimate the mining tax revenue. We can't possibly give it to you because they tell us they are going to pay tax and if you had a chance to look at these assumptions and scrutinise them you might actually be able to find out that they are not going to pay any tax at all.'
This is the track record of this government: stuff up followed by cover up. It is for these reasons that there is absolutely no way that on legislation like this, which involves the government collecting money from people out in the marketplace, that we would under any circumstance be prepared to give this government a blank cheque. It has demonstrated again and again that it cannot be trusted. That is the fundamental problem with this government.
This government is a government that cannot be trusted. This government is a government that is led by a Prime Minister who went to the last election and told the Australian people, 'There will be no carbon tax under the government I lead.' Of course, we know what has happened since then. This government is led by a Prime Minister who knifed Mr Rudd about 15 months ago. This is a government that is led by a Prime Minister who has now knifed a Speaker of the House of Representatives in order to look after her own political self-interest. This is a government that is led by a Prime Minister who will do anything, anything whatsoever, to hold on to political power irrespective of the national interest. This is a government that is led by a Prime Minister who could not care less about the national interest. This is a government that is led by a Prime Minister who cares only about keeping the keys to the Lodge. That is why, whenever a government led by this Prime Minister puts forward legislation, the Senate should be very careful. On behalf of the coalition, I move:
At the end of the motion, add:
and further consideration of the bill be an order for the day for the third sitting day after the government publicly releases a final draft of the regulations dealing with the proposed financial market supervision cost recovery arrangements.