The Week in Politics
The week in politics has been dominated by the Financial Services Royal Commission largely because the government has ended up with egg all over its face.
From Monday, when AMP was revealed to have illegally misled the Australian Securities and Investment Commission (ASIC), the government has been playing catch up.
These revelations were followed by outrageous stories of financial planners charging trailing commissions for services they never delivered.
Following these, together with stories of rorts by the Commonwealth Bank, government ministers were forced to agree that the Royal Commission – which they had opposed – was a good thing after all.
Treasurer Scott Morrison, Finance Minister Mathias Cormann, and Assistant Treasurer Kelly O’Dwyer were forced to eat crow and, by Thursday, Senator Cormann was admitting that the remit of the Royal Commission may need to be extended.
Contrary to the views of a number of commentators, the government cannot unilaterally extend the term and powers of the Commission: it’s up to the Commissioner to ask for an extension.
There were also calls from some commentators for bank executives to be sent to prison.
This seems to overlook the fact that the Commission can only recommend that people be investigated.
It is up to the bodies with investigative powers, such as ASIC and the Australian Prudential Regulatory Authority, to charge people who have engaged in illegal conduct.
Nevertheless the government has introduced bigger penalties for people or entities who have breached financial regulations.
The sentence for an individual has been increased to 10 years in prison and the financial penalty for financial institutions has been jacked up to a maximum of $200 million.
Some of the stories involving individuals have been hyped by the media but don’t reveal misconduct.
By way of example the nurse, who was told she could borrow $2 million to buy a bed and breakfast operation, appears not to have much business sense.
If she had developed a business plan then she would have known that borrowing $2 million to start a B and B in rural Victoria was totally unrealistic.
From the Gallery •The Joint Committee on the National Disability Insurance Scheme held a discussion on Tuesday in Perth on general issues around the implementation and performance of the NDIS.
• On Thursday the Prime Minister of Australia Malcolm Turnbull and the Prime Minister of the Solomon Islands Rick Houenipwela announced a commitment to deliver a high-speed undersea telecommunication cable between Australia and Solomon Islands.
• The Minister for Trade, Tourism and Investment held the 100th Free Trade Agreement (FTA Seminar on the Gold Coast on Friday.
• Acting Prime Minister Michael McCormack attended the Trucking Australia conference at the National Convention Centre in Canberra on Friday to talk about freight and logistics in the Australian economy.
• Your taxes at work: Taxpayers will ante up a mozza to establish Peter Dutton’s new super Department of Home Affairs. According to information released as part of the Senate Estimates process, the department estimated the capital costs involved in setting up the new portfolio to be $2.7 million while other costs had reached $2.3 million at the end of January, a total sum of $5 million which Secretary Mike Pezzullo described as “quite modest” when he appeared before an Estimates hearing in February. The biggest single item is $1.8 million to establish a new ‘Executive Headquarters’ to “co-locate a number of departmental executive functions into one location” cheek by jowl with Parliament House and quite some distance from the Department’s operational centre close to Canberra’s Belconnen town centre. The weirdest item turns out to be $9,000 to buy new bookmark.
• The Minister for the Environment and Energy Josh Frydenberg announced he will travel to Yogyakarta, Indonesia, to represent Australia at the third Asia-Pacific Rainforest Summit on Sunday. “As part of the Summit, I will deliver a keynote address that highlights the action Australia is taking to reduce greenhouse gas emissions by 26 to 28 per cent below 2005 levels by 2030. Consistent with the Summit’s theme, Protecting Forests and People - Supporting Economic Growth, Australia has set” the Minister said.