ABC 774 Melbourne Drive (1)

20 April 2018




SUBJECT/S: Banking Royal Commission


RAF EPSTEIN: Jim Chalmers is the Shadow Minister for Finance, part of the Opposition Leader Bill Shorten's treasury team. Thanks for joining us.




EPSTEIN: My Friday is doing really well mainly because it's Friday.


CHALMERS: You knock off a bit later than a lot of people.


EPSTEIN: That's OK. I have a lot of fun doing my job. If this runs longer, do you want it to run longer in the hope that you win the election and can sort of claim credit for whatever recommendations the Commission recommends?


CHALMERS: Not for political reasons, but I am a little bit worried that the Commission won't have the time it needs to finish its good work. It's doing a terrific job, it's vindicating our calls more than two years ago, as you rightly point out, for it to get to work to get to the bottom of some of these outrageous scandals. You don't want it to go forever. You want there to be a conclusion to it. But equally you don't want it to be artificially cut short. So I'm a little concerned that the time frame it's been given might be insufficient. It's good to see that if Commissioner Hayne asks for more time, he's likely to get it and Labor would support that too.


EPSTEIN: The Government has been doing a lot. They were slow to a Royal Commission, but if I can roll out some of things that they have introduced - there's a one stop shop for complaints; there are higher standards than there were for financial advisers; they've beefed up ASIC; there are, as there was announced today, hefty new penalties for corporate and financial misconduct, and that includes ASIC being able to ban people from the financial services sector. They're all good first steps aren't they? You're not going to unwind any of those things that they've introduced?


CHALMERS: We've supported most of those things that you've identified, Raf, but the point that we've been making for a couple of years now is that they're not a substitute for a Royal Commission and our position has been vindicated by the sorts of revelations that you've mentioned a moment ago. So they have our support, including today. Obviously we're up for stronger penalties for people who've been caught doing the wrong thing. We're up for, as I've just said, making sure that Commissioner Hayne has the time and resources to finish the job properly. We also think that things like compensation should be part of the conversation as well. But all of those things that you've just listed are not substitutes for the Royal Commission that's underway now.


EPSTEIN: How much compensation? We still haven't quite worked that out with the Royal Commission into sex abuse in institutions. What sort of compensation figure are we looking at, do you think?


CHALMERS: It's too early, far too early, to start nominating a number.


EPSTEIN: It's got to be hundreds of millions of dollars, doesn't it?


CHALMERS: I wouldn't come at that, Raf. I don't think it would be responsible for me to pluck a number out of the air. These are very complex matters. The Royal Commission's still got some time to run. The point that we're making today is we think it should be part of the conversation. Because a lot of these real people and real businesses who have been pummelled, frankly, by the rorts and rip-offs in the banks, they deserve genuine justice. They are getting the opportunity to be heard right now and that's a terrific thing. But we also need to make sure that we, if necessary, update our laws and update our regulations and talk about things like compensation too.


EPSTEIN: It could potentially be a very different political environment for you though, couldn't it? Because at some stage the Royal Commission will turn their attention to the industry superannuation funds. Bill Shorten was a union leader. He was formerly a director of one of those funds. Do you think that you'll be as happy with the Royal Commission when they focus on those funds?


CHALMERS: I'm glad you asked me about that, Raf, because I noticed that some of the Liberal Party spokespeople have put about this lie that the industry funds wouldn't have been part of what we were proposing a couple of years ago. I was part of that announcement, I had the Financial Services portfolio at the time, and we wanted it to be a broad Royal Commission.


EPSTEIN: No, I understand that, and I pointed out yesterday I think Kelly O'Dwyer got that wrong yesterday on AM.


CHALMERS: Yeah, she did. Absolutely.


EPSTEIN: But, the industry funds have very heavy union links. I mean, that's part of the purpose that they are there. You're going to be a little uncomfortable aren't you, once they become the focus?


CHALMERS: No, it's appropriate for the entire financial system to be looked at, Raf. I think it's a good thing by the way, to have workers' representatives on these superannuation fund boards. I think it's part of the success of Australian superannuation, that we've got a model of workers and employers on these boards. They're often the best-performing funds.


EPSTEIN: So Bill Shorten's got nothing to fear from that?


CHALMERS: No, they should all be subject to the same sort of scrutiny. Every part of the financial system should be part of the same scrutiny.


EPSTEIN: But Bill Shorten himself has nothing to fear with that focus?


CHALMERS: I wouldn't have thought so, no.


EPSTEIN: When will it finish?


CHALMERS: At the moment, there'll be an interim report in September, then the final report in February. But as I said before, I think a lot of people who are following this as closely as we are would probably conclude that it'd need a little more time. That's a matter for Commissioner Hayne to determine, but it wouldn't surprise me if it needs longer than that. If they ask for more time, I'm pleased to see the Government said that they'll give it and obviously we'll support that too.


EPSTEIN: Thanks for your time.


CHALMERS: Thank you, Raf.