Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

I rise to speak on the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008, which I will address very briefly as I am due in the chair soon. The Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill has measures which simplify and improve existing processes and add accountability. On those grounds, the Australian Democrats support the bill without amendment. The bill amends the Banking Act 1959, the Insurance Act 1973, the Life Insurance Act 1995 and the Superannuation Industry (Supervision) Act 1993, collectively known as the prudential acts. It amends the Retirement Savings Accounts Act 1997 and the Financial Sector (Collection of Data) Act 2001. It aims to improve the efficiency, transparency and consistency of the process for disqualifying individuals from operating financial sector entities and enhances the accountability of the regulator for administrative decision making under the prudential acts, the RSA Act and the Financial Sector (Collection of Data) Act.

The amendments introduce a court based process for the Australian Prudential Regulation Authority when seeking to disqualify an individual from operating an entity regulated by APRA. They streamline APRA’s directions powers where appropriate, remove ministerial consent from and expand the availability of merits review for appropriate administrative decisions made by APRA under the prudential acts and the FS(CoD)A. There are four schedules. Withdrawing the minister from particular consent requirements and increasing APRA’s powers are good advances in terms of the appropriate delegation of powers and the proper responsibility of an independent, objective authority in these matters. These changes were developed under the previous government’s aegis and are very useful and helpful in the proper operation of APRA’s responsibilities. Therefore, the Democrats will support the bill in full.

Helen Coonan (NSW, Liberal Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

The opposition supports the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008. I want to make a few brief remarks. The bill responds to recommendations in Rethinking regulation: report of the taskforce on reducing regulatory burdens on business that are relevant to prudential decision making, as well as recommendations made by the HIH Royal Commission. The bill simplifies regulation of the sector and ensures that the Australian Prudential Regulation Authority, or APRA, is able to act decisively to address risks in the financial system. At the same time, it enhances the review mechanisms available to individuals and entities affected by prudential decisions made under financial sector legislation.

There are four main objects, which I will mention briefly. The bill introduces a court based disqualifications process, based on fit and proper grounds, disqualifying individuals from roles of responsibility under APRA regulated industries governed by the Banking Act, the Insurance Act, the Life Insurance Act and the Superannuation Industry (Supervision) Act. This process is consistent with the court disqualification regime in the Corporations Act and is a necessary alignment. APRA’s power to issue directions to deal with prudential concerns will be harmonised across the different acts, which currently give APRA separate authorisations. APRA’s decision to issue a direction will be subject to merits review. The bill removes the requirement of ministerial consent for certain APRA and Australian Taxation Office decisions that do not involve policy issues—for example, the licensing of a trustee of a superannuation entity. Some ministerial powers will remain, where they relate to national interest matters. Lastly, the bill expands the availability of merits review for decisions by APRA and the Australian Taxation Office under the SI(S) Act.

The bill is, effectively, the reintroduction of a bill with the same title that was introduced by my colleague the Hon. Peter Dutton MP, the then Minister for Revenue and Assistant Treasurer, on 13 September 2007 and that lapsed on the calling of the election. That bill contained a number of transitional provisions, the commencement of which depended on the commencement of other bills. One of those bills has since been enacted. Consequently, certain commencement date provisions have been changed in the 2008 bill. The bill raises no additional material issues that had not been considered by the previous government, and the opposition will be supporting the bill.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

I thank all senators who have contributed to the debate on the Financial Sector Legislation Amendment (Review of Prudential Decisions) Bill 2008, and I commend the bill to the chamber.

Question agreed to.

Bill read a second time.