Senate Economics Legislation Committee, , 3:02:13 to 3:18:23
The committee reviews government responses to inquiries regarding regional banking, insurance, and the Compensation Scheme of Last Resort.
Topics: Infrastructure, Health, Drought and disaster support
Speakers: Hon Matthew Canavan, James Kelly, Hon Katy Gallagher, Robb Preston, Andrew Bragg, Lisa Darmanin, Lynn Kelly
>> Thank you, Chair. Um I just uh wanted to ask about some reviews I think that are within the markets group. Um uh have you provided a draft government response to the statutory inquiry into ASICH the takeovers a panel panel in the
>> I'm just going to Senator I'm just going to check my folder.
>> Sure. I believe this was tabled in or report was um yeah tabled it says here in April 2024.
So, Senator, I'm I'm assuming you're asking the question because we haven't provided a response.
>> Well, I'm asking, have you my understanding here is that the government has not responded, >> but have you provided a draft response or any advice on that report to the getting up to two years now?
>> Can you just tell me the name?
>> The statutory inquiring into ASC, the takeovers of panel and the corporations
legislation. That is that is an inquiry in which we have provided a draft response.
>> You have provided a draft response. When did you provide that response to
>> Uh I don't have that information, Senator. I'd have to take that on notice.
>> Okay. All right. Um the next one I'm interested in is the uh Senate inquiry into bank closures in regional I don't think we've got a response on that. >> Not that I've seen.
>> No, we haven't. Sorry, we haven't provided one. think we've provided a draft respon
>> provided a draft on that. Have you briefed the minister at all? Provided a brief on the report?
>> Um, Senator, we've done a range of briefing and a lot of work related to regional banking issues and related to regional banking um you know the kind of distribution of cash and the acceptance of cash in the system. So it is a major focus or kind of stream of work within the group currently. Um it's just those resources have been used to advance the substantive issues and not at this stage providing
>> all we're getting on nearly two years from that. Uh so it seems strange there hasn't been a government response to it. I might come back to the uh the regional banking issues. Next one I wanted to check was inquiry into promoting economic dynamism, competition and business formation. It was also in May 2024. Have you provided a draft response
Um, no, not at this stage. Senator,
>> um, the inquiry into insurers responses to 2022 major flood claims.
the notes I have say we have not yet provided a response on that.
>> Cyclone reinsurance pool inquiry.
>> Uh, no senator.
>> Uh, the financial services regulatory framework in relation to financial abuse. risk on insurance premiums and availability inquiry.
>> Uh, no, Senator.
>> So, I think I've just read out one, two, three, four, five, six, seven reports. Many of these, most of these in 2024, only one tabled last year. You've only prepared a draft response on one of those. Is that right? a moment.
>> So, so Senator, like when a um parliamentary committee makes a report, we're obviously mindful of the um requested timelines for a government response, the kind of houses that have resolved, which is 3 months for I think Senate and joint, 6 months for House Committee reports. Um we always factor that into the discussions we have with ministers and officers as to when they would like a response. Um but we're also conscious of not diverting resources to providing responses if we're not at the right time to give a government response. So a number of the um committee reports that you referred to are on kind of areas of major focus at work within the department. Lang insurance is another example of that. Regional banking was one. And you know when when a report turns up while the government is in a process of working through a range of issues on a matter then it's not always a simple let's just do a response to this report now. It typically is often better to wait till the government has landed the key outcomes of where it wants to go and then that's the point at which sometimes we'll prepare a response.
>> Um well you say you're factoring in that into account but these are nearly we're getting on nearly two years with some of those. So I'm struggling to understand how that's being factored into account. Some of these reports have been initiated by the government. Some of them had a fair amount of fanfare associated with them. Uh Australians have made submissions. they've taken and put provide their own time to participate in the inquiry. I I'm just wondering what level of respect you are playing to those people and to the parliament by not even preparing a draft response within the uh time frames that are requested by both houses of
>> Well, I can say that we do um of course respect the parliament and the committee system and reports. I would say markets group in particular is an area where uh there is a high workload from the usually from the economics committee here and numbers of reports. Um on top of that there's a whole range of other things markets group are doing. So I think it is about managing workloads. I'm happy to get a report uh or some advice back to you Senator Canavan about um the approach for finalizing government responses to those reports that you've asked about today. Um but you know we prioritize questions on notice um you know the all the other work markets are doing um and this is an element of their work but I'm happy to see if we can provide an update for you.
>> Okay. Well, Minister, I might just ask you. I mean, take the promoting economic dynamism inquiry that was uh referred by the treasurer uh Jim Chararma's on the 31st of January 2023. Uh uh you know, people made submissions as I said to this inquiry. I'm just trying to find out. Internet seems a bit slow trying to find out how many submissions were made. Uh 62 submissions by the look of it were made to this why have you or has someone the minister the treasurer inquired with his officials about getting a response to this if this was important enough to refer to the house of representatives economics committee uh why hasn't the government almost two years on from its report uh even drafted a response let
undertaken to uh come back to you with an update on finalizing government responses but I would also say that we do use committee reports routinely to assist us uh with work that is uh ongoing like it's it doesn't mean nothing's happening. If um you know if I'm looking at the terms of reference for that report for example you know that covers uh quite a bit of work that the assistant minister Le uh probably the assistant treasurer and the treasurer are undertaking across their portfolios but I'm absolutely um happy to try and provide you with a more comprehensive response on those reports and when you can expect a government response.
>> Okay. Thank you. just I might and maybe my colleague Senator Bragg would take an interest in this too. I might want to jump in. One of those you mentioned is the uh ASICH investigation that was a very extensive inquiry that uh Senator Bragg led and did a lot of good work on had extensive input uh from the general public. Uh last estimates we did ask about uh that estimates I believe that there would be a government response as I mentioned earlier was tabled in May 2024. We haven't actually got an answer yet though from the question on notice on this. So can I just check that? That was one where the draft response has been prepared. Is that right? >> inquiry.
>> No, there's been no response. No response prepared and I think that was our answer back in December.
>> Right. So no draft response has even been prepared for that. I'm just wondering you did say there would be a response minister.
>> Yeah, I I'm sorry Senator Canavan. I haven't got anything further on that. Um >> I will see if I can provide some more while we're here today.
>> Yeah, you jump in, Senator Bragg. I said you did a lot of good work.
>> Well, I mean, you did say the last hearing, thanks Senator Canavan, that um you agreed with the idea that the government should respond to the ASICH report. Um I I said to you, irrespective of its content, surely the government should respond and you said I agree with that, Senator Bragg. As I said, if I have something more to provide, I will. And I said, when will that be? Blah blah blah. And you said you'd try and get it soon. So, I guess that was in December the 3rd, 2025.
>> Yeah. So, it is it is unusual that we're having estimates so close together um and that there's been, you know, a a a holiday season in between. >> I do believe committee reports should be responded to. Um, that is my view.
>> Has the treasurer suggested to the treasury that they should not respond to
>> I'm not a I'm I certainly not aware of anything like that.
>> Not that I'm aware of. Senator,
>> I just want to be clear on this because it's very unusual for there not to be any draft response prepared into a very detailed report where even the government senators, while they didn't agree with the chair's recommendations, did make their own recommendations. So, just want to be clear on this. Has there been a directive given not to respond to this report?
>> Uh, there hasn't been such a directive. I think as we covered in previous estimates, we did um provide um a kind of general brief or overview on the report when it was issued to to um ministers. Um and as I kind of uh covered in my answer, um we don't, you know, we're not resourced to just prepare a report because the government may want to issue. We have discussions with officers and ministers about when's the appropriate time and kind of when uh and we do check in regularly on those because we do get reporting and we do track where reports are at. Um but it's you know we kind of we we're at the um ultimately we kind of do it when there's we see the opportunity and um it's going to be considered by the minister at that
>> Okay. So you haven't been asked to do
No minister. So it's
>> okay. But the the minister just said that she thought it was important that that report be
>> Well, that that is my that is my view.
>> It's a bit it's a bit unclear.
>> Uh that is my view that um committee report should be responded to.
>> So will you get us a response to this report, please, Minister?
>> I have I have undertaken to provide more information. I'll do what I can Senator Bragg. It's not my portfolio area. So I
here. You're a sitting the cabinet. I mean, we we just want to report to be responded to because it's canvas a lot of issues that are important to the community. People who've lost a lot of money, lost their livelihoods, people feel strongly about this.
>> I understand that. And um you know, just because we haven't responded to a committee report doesn't mean that the government isn't working on a lot of the issues that have been raised through the committee process. So, uh, I'll see if there's anything more I can provide, um, to the committee. Uh, and I, it sounds like we've got a couple of, uh, questions on notice to respond to, too.
>> Okay. Well, thanks for that. I mean, I just make the point again of the work that Senator Bragg did, but more importantly, the there were nearly 200 submissions of that inquiry. There were a lot of heartbreaking uh, uh, cases put before us. uh and it would be good uh for the effort those people put in uh uh for the government to recognize uh at least the issues they raised and and respond. You're obviously not obligated to agree the recommendations but a response would be uh I think appreciated by those people. Uh just uh um related issue I believe there's uh uh um there has been a draft of the post implementation review of the compensation scheme of last resort completed. Is that correct?
>> Sorry, Lynn Kelly, first assistant secretary financial system division. Sorry, could you just repeat?
>> I I'm just I'm informed. Um there was a previous question we put not yet answered but uh uh well sorry I might have misread that has a draft of the post implementation review for the compensation scheme of last resort being
>> We are currently still undertaking the review. So um we're documenting parts of our review process but we haven't got a report as yet because the consultations are still ongoing.
>> Okay. Do you have a timeline for its
completion? Uh we don't have a timeline for his completion but I will note that the um assistant treasurer announced um in December that we would be issuing another options paper um early this year. So that will be coming shortly.
>> Okay. So you are you conducting consultation right now or you waiting for the issues paper to be released?
currently working on the options paper to be released. >> Um however we are regularly engage with stakeholders in relation to the issue. Um, as you would imagine, there are a lot of views.
>> Is there a requirement for this post-simplementation review to be completed by a certain date?
>> Uh, as soon as practicable. Um,
>> Rob Preston, assistant secretary, financial system division. Um the assistant secret uh the um assistant treasurer outlined in his media conference of the 10th of December that we provided him advice on some findings from the the review and that the um the announcement that he made about progressing the review through a series of consultation papers. This is how he's planning to take the work forward. So we uh he released a consultation paper into the role of p um uh PII um indemnity insurance in relation to CSLR um uh on that day and it's I think closing uh it's up for consultation at the moment closing I think on the 13th of February and flag that uh early in this year further consultation will occur on matters relating to the CSLR um and and that's that's how the review will be being progressed.
>> Okay. So I did ask before whether a draft had been prepared. I think you said no. But Mr. Preston, you just said that you had presented findings of the review to the assistant treasurer. Had that has that happened? Yeah, we
provided um our advice on um what we had we received a number of consultations um from the initial round of um uh uh um the review in in early 2025 and then also following the release of the uh consultation paper on the special levy that was conducted in around July of last year. um we outlined sort of the feedback that we're receiving um and um pro gave our assessment of >> where the CS Lar is at um and the
>> So when were those findings provided to the assistant treasurer?
>> Yeah, as the minister indicated in his press release. We provided him a briefing on
>> Oh, sorry. When
>> when uh I will have to take the date on notice.
>> Okay. It was obviously before the 10th of December then before the press conference he held. Okay. Uh well, yeah, just last question then. So, uh so that wasn't a draft response as a draft report as such. It was just some early findings or something or
>> No, I wouldn't constitute it as a draft response better.
>> All right. And the options paper will be outlining or being informed by your findings will it to outline a range of options that could to change the scheme or reform the scheme if you want to put it that
>> I think that's fair characterization. Um and we're also you know receiving ongoing feedback such as through the assistant treasures round table. Okay.
Thank you, chair.
>> Thank you, Senator. Uh, Senator Payman.