E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RN BREAKFAST
MONDAY, 23 APRIL 2018
SUBJECT/S: Banking Royal Commission; Turnbull’s failure of leadership; Newspoll; Pauline Hanson’s support for Liberals’ $65 billion tax handout
FRAN KELLY: Jim Chalmers is the Shadow Finance Minister. Jim Chalmers, welcome to Breakfast.
JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Morning, Fran.
KELLY: So, Malcolm Turnbull has said now with the benefit of hindsight, it would have been better for the Government if it had set up the Royal Commission when the Opposition first called for it two years ago. Are you happy now?
CHALMERS: It's a pretty shabby mea culpa, Fran. I think it's the sort of mea culpa you have when your heart's not really in it. He's not taking responsibility. He's not apologising. He's just giving us the equivalent of 'sorry that you people are angry about it'. This wasn't a political mistake, it was a failure of leadership. And it was an inability to stand up to the top end of town in the interests of ordinary Australians.
KELLY: I guess so, but if you accept that, doesn't the same go to your calls for an apology? It's not going to change anything. It's just a political move, isn't it?
CHALMERS: Malcolm Turnbull is saying that he should've called this earlier to avoid some political pain, not because people were being ripped off while he resisted. We think this is a sort of half-hearted mea culpa when really he should be apologising for the people who got ripped off while he fiercely resisted the Royal Commission that Labor was calling for.
KELLY: But when you first were calling for a Royal Commission, back in April 2016, Labor really didn't have any idea just how rotten some of these practices were in the financial sector, did you?
CHALMERS: We had a sense of it, Fran. Because you'll recall that around that time we had the issues around CommInsure, we had the issues and the allegations around rate rigging in some of the other banks, so yeah there was a bit of a sense of it. But I think the whole country has just been appalled by the revelations coming out of the Royal Commission, which do vindicate that two year campaign that Labor's been running. And I think it's a terrific thing that Commissioner Hayne is doing such a good job getting to the bottom of some of these issues.
KELLY: Labor, when it was in Government, brought in financial reforms. They were called the FoFA reforms - Future of Financial Advice reforms. They were meant to eliminate the kind of misbehaviour we're seeing come out before the Royal Commission - customers being charged fees for no service, for instance; advisers were meant to check in with their customers regularly. Clearly they didn't work. Why not?
CHALMERS: There's no question that some of the big institutions have run foul of those changes that we made. It's worth remembering of course too Fran, that when we brought in those new rules for financial advice, when the Government came into office they tried to water those down. That's the symbol I think of the sort of approach they've taken.
KELLY: Yeah, but they didn't water them down, so they're still in place, but they've not worked, right?
CHALMERS: Well they've been flouted, obviously, and that's one of the important things that we're discovering at the Royal Commission. And if further steps need to be taken in that area, we need to take them.
KELLY: There were concessions even within your FoFA reforms. In hindsight, was Labor too soft on the finance sector? Did you succumb to lobbying by the banks and others that meant some of these poor practices, some of these commissions etc were allowed to continue?
CHALMERS: I don't think anyone could come to that conclusion, Fran. We did a lot of good work when it came to the regulation of the banks.
KELLY: I'm not discussing that they weren't needed and they didn't make some difference, but did they not go far enough?
CHALMERS: Clearly we need to do more now because of these revelations out of the Royal Commission. Obviously, more needs to be done and we will have a lot more to say about additional measures that we can take.
KELLY: Now the Prime Minister, in acknowledging that they would have had less political grief if they'd acted sooner, you can't look backwards, he says. He says also, meanwhile we've put in a lot of protections, a lot of worthwhile reforms, including beefed up powers for ASIC, the new one-stop shop for customer complaints, known as the financial complaints authority, tougher professional standards for financial advisers - all that's happened, and as the PM says and I'm quoting him: "a Royal Commission can't send somebody to jail, it can't fine anybody. You have to change the law." Do you give the Government credit for changing those laws?
CHALMERS: We supported a lot of the measures that the Government's taken over the last little while. But they're no substitute for the Royal Commission. And even in that quote that you just referred to, Fran, you can tell that his heart's just not in this Royal Commission. He's still trying to make excuses for why it's not necessary. Nobody else watching this Royal Commission could think that it isn't an important endeavour, that it isn't an important development. There's nothing about the Royal Commission that prevents other steps being taken.
KELLY: The Government acknowledges it's an important development. I mean it could have longer time if it needs it. They're clearly on board with it now.
CHALMERS: I don't think when you listen to Malcolm Turnbull...
KELLY: Hang on, Jim Chalmers, I've just got to interrupt you. Your phone is fading out badly. I'm not sure if there's anything you can do about that. I'm not sure where you are, but have another go at that.
CHALMERS: Can you hear me better now, Fran?
KELLY: I can, yep.
CHALMERS: Can you repeat your question?
KELLY: Well the point was, Malcolm Turnbull didn't... actually, I can't remember my question, Jim Chalmers, to be honest (laughs).
CHALMERS: Sorry about that.
KELLY: It's more about getting on with the changes we need and, you know, you can't send someone to jail, you can't fine anybody. You've got to change the law to do it and the Government's done that.
CHALMERS: Well I think in the Royal Commission, I mean we've had a resignation of the head of AMP for example. That's a pretty important development that's flown from the Royal Commission that didn't require new legislation. I just think that all of the things that Malcolm Turnbull has said about this Royal Commission, he pretends he's all in favour of it, but he's still making arguments against it.
KELLY: Well he's not though, he's not. This was my question, I recall now: he's said that the Royal Commission can have longer. Clearly they're supportive of the work it's doing?
CHALMERS: If Commissioner Hayne needs more time to finish his good job properly, then we would support that. We also think that a proper compensation scheme should be a more serious part of the conversation. And I don't think that that shows anything other, from Malcolm Turnbull, than he recognises he's got a political problem. That really goes to the core of what he said overnight. He thinks this is a political issue to be managed. He thinks it's an issue of political commentary. We think it's a failure of leadership from the Prime Minister and we think it's an inability to see the world through the eyes of ordinary people.
KELLY: It's fourteen minutes to nine, our guest is Shadow Finance Minister, Jim Chalmers. But Labor clearly sees a political opportunity here too. Are you disappointed with Newspoll today, which shows the gap closing between the Government and the Opposition, even with all of this bad news about the banking sector?
CHALMERS: Look, we don't get too carried away with the little fortnightly shifts, Fran; whether we're up by one point or five points. We don't obsess over them like our opponents do. I think the point I would make is that a poll result like this still won't placate Turnbull's enemies in his own party room. If they're angry that he lost 30 in a row, they won't be any happier now that he's lost 31.
KELLY: Bill Shorten has written to the Prime Minister, demanding a number of things. One of them that compensation scheme for victims you referred to. The banks are already providing redress for hundreds and thousands of customers hurt by the misconduct. They've paid back hundreds of millions of dollars already, haven't they? Aren't we already doing that?
CHALMERS: We need to work out whether we can do that better, Fran. Whether we can do that more substantially. Bill has written to the Prime Minister to say let's make this a central consideration of the Royal Commission.
KELLY: The Prime Minister has pointed out it's already within the terms of reference for the Royal Commission, isn't it? Some provision for compensation?
CHALMERS: The terms of reference talk about the adequacy of existing forms of redress, which really goes to the heart of your first question about this. But what we want to do, is we want to see a proper compensation scheme worked up. We want to see it properly considered by the Commission, by the Government, and we'll play a constructive role in that too.
KELLY: Can I just ask ask you finally, Labor does not support company tax cuts. But if there is company tax cuts, what's your view? Pauline Hanson and Derryn Hinch say the banks should be excluded from them. Would Labor support a sort of two-tier tax rate like that? Kelly O'Dwyer has dubbed it a morality tax.
CHALMERS: No, we don't support broadly the tax cuts for the banks and multinationals, which come at the expense of middle Australia and smash the Budget. Pauline Hanson's trying to pull a swifty here on the Australian people. She has indicated that she will vote for Malcolm Turnbull's tax cuts for the big banks. If she's so against the banks, why is she voting to give them $13.2 billion over the next 10 years? One Nation votes with the Liberal Party 90 per cent of the time in the Senate, and this is another example of that. Derryn Hinch has got an entirely defensible position about splitting them out, but Pauline Hanson's position on this is fraudulent. She intends to support the banks getting Malcolm Turnbull's $13.2 billion tax cut.
KELLY: Jim Chalmers, thanks very much for joining us.
CHALMERS: Thank you, Fran.
ENDS
