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Speaking on the ASIC Amendment (Corporations and Markets Advisory Committee Abolition) Bill 2014
I welcome this opportunity to speak this afternoon on the Australian Securities and Investments Commission Amendment (Corporations and Markets Advisory Committee Abolition) Bill 2014. As previous speakers have said and as the name suggests, the purpose of the amendment is to discontinue the operations of CAMAC, along with its legal committee, which was initially set up in 1991. The bill proposes that the operations and functions of CAMAC cease within 28 days of royal assent. Through this bill, the government is in a small but important way fulfilling two key commitments that we made prior to the election. The first was getting the budget back in order and paying back Labor’s monstrous debt; the second was seeking to provide a more streamlined, lean and efficient government.
I have some sympathy for aspects of the complaints of members opposite, but from their chorus of complaints one is that this is a saving of only $2.8 million to the budget and is therefore completely unnecessary. It was ultimately that kind of thinking that put us on a trajectory of $667 billion of debt—that each million dollars did not matter. We have taken the view in reviewing the operations of government that, to be lean and to operate as small a government as we possibly can, we must look everywhere for savings. CAMAC is part of that and so the $2.8 million of savings over the forward estimates with the abolition of CAMAC is important. The two aims of getting the budget back under control and striving for ever leaner government are interconnected aims. We on this side of the House know that in order to repair the budget a lot of work has to be done and no amount of obfuscation by members opposite will make it go away—and it cannot be wished away.
It is quite opportunistic for those opposite to wish it all away and pretend there is no problem. But there is a problem. It is salient to remember the key facts. If we had completely unrestrained ability to generate revenue, then government’s decisions might be different, but at the moment we are borrowing over $1 billion each and every month just to pay back the debt left by Labor. That is $1 billion each month rising to $3 billion, if debt is not restrained in the future. The scary thing is that we are paying at $1 billion of interest a month now with record low interest rates and record low debt rates for government accessing debt. If, as I suspect, interest rates rise in the not too distant future, it is scary to think what the debt and interest burdens Australian taxpayers will have to bear. Every dollar of interest that we pay to a foreign lender is a dollar less that goes to a school or a hospital. I would caution members opposite from scoffing at the savings come out of this bill—the $2.8 million of savings over the forward estimates. Sure, it is not sheep stations, but we have to look at every area of government and we have to make tough decisions between competing objectives.
Some economists have forecast—I read in the paper on the weekend—that within a few decades’ time government debt in Australia will be 50 per cent of the economy and could rise to over 100 per cent of our annual GDP. Again, the thinking of members opposite is that we can ignore these problems and not tackle them with quite sensible and small measures like the abolition of CAMAC, but I would caution them against that. The bill before us today fulfils a commitment made as part of the budget process. I have alluded to that $2.8 million of savings over the forward estimates and, while this figure is a small stand-alone figure, ceasing the operations of small bodies and committees such as CAMAC generate savings beyond the annual appropriation. As we all see from our committee work and all of the oversight that goes into bodies such as this, the ongoing operation of small agencies like CAMAC absorbs resources across the wider Commonwealth public service, and the oversight and administrative costs are obviously on top of the direct appropriation of $2.8 million. So the savings are somewhat larger than that.
But when these cost savings are multiplied across the federal government in its entirety, we are talking about a big number. One of the scary things that we realised when we came into government was that we asked the bureaucrats, ‘Please give us a list of every committee and every body that the federal government funds or administers in some way.’ We could not get that list. We could not get a definitive list of every single committee or body that is funded by the Commonwealth government. If that does not tell you that we need to put a ruler over bodies such as CAMAC, then I do not know what does. Again, I think this is a very sensible change. The decision to abolish CAMAC, along with a number of other government bodies in that big list that no-one could actually give us, also fulfils the second commitment that I alluded to earlier: to deliver a leaner, more efficient government sector. The abolition of government bodies like CAMAC will improve coordination and accountability, reduce the costs associated with separate governance arrangements, and increase inefficiency in how public funds are utilised.
It is always going to be pretty tough to walk into this chamber and try and convince the Australian Labor Party that we should have a smaller, leaner government. Because ingrained in their DNA is bigger bureaucracies, bigger governments, that government funding of any body is preferable to allowing private enterprise or private experts to provide the type of service that CAMAC has provided. I think that in the comments of members opposite today that ingrained ideology has come through, in saying that government will not be able to source the kind of advice provided by CAMAC in any other way. That also impugns every private sector individual involved with CAMAC. For people involved in business, professional bodies—legal, accounting—they will continue to provide independent advice to government. If we cannot consult with the private sector, presumably those opposite are arguing that we should set up bodies in every conceivable field of public policy and get advice from them, because there is no point in consulting with private enterprise, industry bodies, the Law Council or any of the other professional bodies. That does not meet any test of scrutiny.
As members of our government are aware, we are proud of the fact that we have removed thousands of pages of regulation and slashed more than $2 billion in business regulatory compliance costs. I know those opposite are sick of hearing that, but that is something that we are very proud of, as being a huge achievement in the first year of government. It ultimately allows business to spend less time and money dealing with regulation and more on creating new jobs. So our smaller and more rational government reforms, of which this bill is a part, form a key component of our important deregulatory agenda.
As former speakers have said, CAMAC was established for reforming and renaming previously existing bodies with the purpose of providing advice to the government on matters relating to the reform of corporations and other financial and securities related legislation. This was part of an effort to bring about a national framework for corporations and securities regulations in the 1980s.
CAMAC and its predecessors provided the Commonwealth with an independent group of corporate experts who could provide advice on the progress of the implementation of the newly unified laws in this area. The body also sought to provide an avenue for the industry to voice its views and concerns on any proposed changes or reforms seen as desirable in the area of corporations and financial law. So for the reasons I have outlined earlier, we do not believe the case is justifiable to have a taxpayer funded committee of this nature, due to the availability of other more important bodies who already provide a role in performing this function.
Whilst we recognise the important contribution that CAMAC has had over the years to law reform in these areas, this bill recognises that the business and economic environment has changed since the agency was first established in 1991. As I have said earlier to members opposite, we are fully confident in the professionalism and capability of business and industry groups to make their case to government without the need for additional bureaucracy. The abolition of CAMAC will not prevent or hinder the ability of business, the business community, experts, those people who are engaged in professional bodies, whether they be lawyers, accountants, bankers or others, to advise government in good faith what they believe is in the best interests of that policy area.
With the passage of this bill, the government will also continue to seek independent, high-quality advice when necessary, ensuring that advice provided is practical and evidence based through utilising specialist, relevant expertise, such as has already happened, whether that be through panels or other appointees and industry experts.
After the abolition of this body, the Treasury’s Markets Group, as other members have also highlighted earlier, will continue to advise the government on matters of corporate law, financial markets and financial services. This advice will continue to be informed by regular engagement with the broader industry and relevant experts in the field. Further, ASIC will retain the ability to provide advice to the government of the day, whoever that may be, on matters associated with amendment or law reform in these areas. It already happens. None of ASIC’s functions will be altered as a result of this bill.
Of course, the government will also be able to refer matters to the Productivity Commission as well as the Australian Law Reform Commission to assist in any work that is required. Both of these bodies have previously completed reviews on matters such as the regulatory burden on business, insolvency law and, relatively recently, managed investment schemes. So I and the government believe that, when all of that is taken into account, this is a sensible bill given the changing economic circumstances and that it fulfils, as I said, two of the government’s key aims—and that is leaner, more efficient government with less red tape and also providing reasonable savings to the budget.
In the case of CAMAC, the evidence is apparent to me that there are numerous other government agencies that will be more than capable of performing the tasks that CAMAC now performs and, therefore, I see this as an absolutely sensible bill which fulfils a commitment we made at the time of the budget. I therefore commend the bill to the House.