11 Nov Draft laws put ASIC on notice to toughen up
Sydney Morning Herald – David Crowe – Wednesday 11 November 2020
The Treasurer has signalled plans to toughen enforcement at the corporate watchdog, unveiling draft laws to crack down on aggressive sales tactics in personal finance.
Josh Frydenberg aired his concerns about the Australian Securities and Investments Commission in a meeting with Coalition colleagues to approve his next response to the banking royal commission.
The moves clear the way for a bill to be introduced to Parliament this week to toughen “anti-hawking” measures against hardsell tactics for insurance and other products.
But a bigger fight looms over separate laws to ease lending rules and free up credit, as consumer advocates call on Labor, the Greens and the Senate crossbench to reject the changes.
Labor has accused the Coalition of taking too long to act on the findings made by commissioner Ken Hayne in his final report of February 2019, but the government has cited the pandemic to push back its plans by six months.
Mr Frydenberg took the next phase of his response to the Coalition backbench treasury committee on Sunday night ahead of a formal vote at the Coalition party room meeting today and the likely introduction of the draft law to Parliament within days.
The bill is expected to include anti-hawking measures, tougher rules on insurance sales and a new oversight authority for ASIC and the Australian Prudential Regulation Authority.
Sources in the Sunday night meeting said Mr Frydenberg expressed his concerns about ASIC and said it needed a stronger focus on monitoring misconduct.
That remark drew support in the meeting from Liberal MPs who believe ASIC needs a shake-up after an expenses dispute led its chairman, James Shipton, to step aside.
The committee overseeing the regulator will call acting ASIC chair Karen Chester to a hearing on November 18 to consider whether ASIC needs a different structure to achieve stronger enforcement.
The chair of the parliamentary joint committee on corporations and financial services, Victorian Liberal senator James Paterson, said last week the regulator’s leadership structure “does not work”.
Mr Frydenberg is waiting on a review by Vivienne Thom, a former inspector-general of intelligence, into the $118,000 tax expense for Mr Shipton and a $69,621 rental expense claimed by deputy chair Daniel Crennan, who resigned last month.
Both men have repaid the amounts and are said to be considering their legal position, given the regulator approved their expenses.
Labor assistant spokesman on treasury policy Andrew Leigh said the Thom review should not take two months as planned.
“Amid a recession and a pandemic, it’s irresponsible to leave ASIC leaderless until the end of the year,” he said.
The next step in the government’s finance changes will be the responsible lending bill, which has been issued in draft form for public consultation due by November 20.
Consumer Action Law Centre policy director Katherine Temple called yesterday for the bill to be blocked on grounds it would weaken protections for bank customers.
The Coalition party room has backed the changes so far, with MPs frustrated at ASIC rules and lending standards that prevent customers gaining home loans or other finance.