The Federal Government has signalled it won’t necessarily be backing new powers for the financial services regulators but, rather, making them enforce existing laws and regulations more efficiently.
The Treasurer, Josh Frydenberg has used an address to a Sydney Forum to reference the upcoming final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and to directly point to the Commissioner, Kenneth Haynes view that not much will be gained from adding another layer of legal complexity.
He said the Government’s overall objective was to restore trust in the financial system and that this would require “a culture of compliance and accountability, regulators that are fit for purpose and an acknowledgement by the sector that people must be put before profits”.
“In his Interim Report, Commissioner Hayne makes the telling observation that ‘much more often than not, the conduct now condemned was contrary to the law’," Frydenberg said. “He makes clear that while behaviour was poor, misconduct when revealed was insufficiently punished or not punished at all.”
“This raises the issue as to whether new laws are required or whether existing laws simply need to be better enforced. Simplification may be, according to the commissioner, a better route rather than adding ‘an extra layer of legal complexity to an already complex regulatory regime’.”
Frydenberg also signalled the Government’s willingness to make superannuation an election issue, indicating its backing for the Productivity Commission’s approach to default funds and comparing it to the Australian Labor Party’s continued backing for awards-based defaults.