ABC NEWS RADIO
MONDAY, 26 OCTOBER 2020
SUBJECTS: ASIC expenses and the resignation of the Deputy Chair; the need for a Federal ICAC.
GLEN BARTHOLOMEW, HOST: The Deputy Chair of the corporate watchdog has quit after an audit raised concerns about thousands of dollars in expenses he was given. The Australia National Audit Office flagged irregularities with payments made to Dan Crennan and ASIC Chair James Shipton. Mr Shipton’s stood aside pending the outcome of an investigation. Labor MP Andrew Leigh was among those questioning the ASIC arrangements at a committee hearing at federal parliament on Friday. He joins us now. Thanks for your time.
ANDREW LEIGH, SHADOW ASSISTANT MINISTER FOR TREASURY AND CHARITIES: Pleasure, Glen. Great to be with you.
BARTHOLOMEW: Remind us, how exactly had these regulators breached regulations?
LEIGH: Yes, it was a bit of a bombshell on Friday. We'd been expecting to get a regular sort of update from ASIC and suddenly we had James Shipton saying that he was stepping aside. He disclosed that ASIC had paid $69,621 in housing costs on behalf of Daniel Crennan, and also a tax bill of $119,557 for his own tax affairs. Mr Shipton said he'd be standing aside until the end of the year. The concern is that those payments were a form of remuneration and therefore breached the remuneration guidelines.
BARTHOLOMEW: Alright. So because the people might say ‘well, hang on, ASIC agreed to some of these payments and expenses arrangements rather than something more dubious occurring’, what's the problem?
LEIGH: Yes, the concern is that this pushed them beyond their remuneration limits. And I think the red flag should have gone up for the government when there was a story in the Financial Review on the 23rd of October 2019, saying that Daniel Crennan was being paid more than the Chief Justice of Australia. That ought to have immediately alerted people, but it seems not. It took the Auditor General to call it to the government's attention - the very same Auditor General whose budget has been cut by the Morrison Government.
BARTHOLOMEW: How severely has it been reduced?
LEIGH: Well, he’s been dipping into past cash reserves over recent years in order to keep on doing his job and he made clear to the government this year that he just couldn't keep on doing that, that he needed a $6.5 million extra appropriation in order to keep on doing the same number of audits. Extraordinarily, with debt going to a trillion dollars, the government couldn't find $6.5 million to keep the watchdog going. And that's a particular concern given that it was the Auditor General who uncovered the sports rorts scandal and who has uncovered this particular ASIC problem.
BARTHOLOMEW: Chairman Shipton says ASIC accepts all of the findings. The government's commissioned an independent review to be completed by the end of the year, but the Deputy Chair Dan Crennan says it's in the best interest of the organisation for him to resign now. Has he made the right call?
LEIGH: It’s his personal decision. He was going to go in July of next year. My real concern is that the federal government's been so slow in responding to this. They were alerted to it in the media a year ago, they were notified by the Auditor General a month ago, and now they're going to leave ASIC - the corporate watchdog - leaderless until the end of the year. This ought to be done in a matter of weeks, not a matter of months-
BARTHOLOMEW: How – go on.
LEIGH: The government needs to be clear about what they knew when.
BARTHOLOMEW: How likely is it that there may be similar such in-house arrangements in other government instrumentalities that we may not know about?
LEIGH: It depends on how people are appointed. Straight after we had ASIC, we had the hearing with APRA, the prudential regulator. I immediately asked their head Wayne Byers whether there were any issues relating to his relocation and he immediately said there was nothing there. I just worry too much, Glen, that this represents the kind of approach that the government takes towards public funds. We've seen this already with the Cartier watches scandal at Australia Post, and we've also seen in the case of JobKeeper, where it's being used by a certain number of companies to pay executive bonuses – most recently we’ve seen that out of Solomon Lew’s Premier Investments. It's an approach which forgets that so many Australians are tightening their belts and doing it tough right now, that these are precious public dollars. Public dollars that are splashed on people who are on seven figure incomes aren’t available to help those on JobSeeker.
BARTHOLOMEW: Your colleague and spokesman on government services Bill Shorten says the lesson out of Australia Post is that public sector organisations can't be run like private companies. All of this comes on the day that independent MP Helen Haines has put forward a private member's bill proposing the establishment of an Australian Federal Integrity Commission to the Federal Parliament this morning. She says these recent events show the need for such a body. Is that something the Labor Party is supporting?
LEIGH: Absolutely. We've been supporting an integrity commission since the beginning of 2018-
BARTHOLOMEW: Are you supporting her bill?
LEIGH: Her bill won’t come to a vote. That’s the nature of private member's business, that it’s introduced and then lapses. But we supported the integrity commission. Bill Shorten was out there at the start of 2018, almost a full year before the government said that they would do it at the end of 2018. They said they’d do it within a year. They've missed their deadline now by a full year. The fact is, Glen, you know and I know they don't want to have an integrity commission. They're happy with sports rorts, Parakeelia, HelloWorld, water rorts, air rorts. They're giving money to their mates left, right and centre. Debt’s hitting a trillion dollars, and yet they're telling job seekers that they're going to have to live on 40 bucks a day come next year.
BARTHOLOMEW: Meanwhile, the chair of Australia Post has clarified the total cost of those four luxury watches bought for the senior employees was more like almost $20,000 rather than $12,000. Let's see if there are other shoes to drop. Andrew Leigh, thanks for your time today.
LEIGH: Thanks as always, Glen.
BARTHOLOMEW: Labor MP Andrew Leigh in the federal parliament today in Canberra, as he was on Friday, asking some of those questions around ASIC arrangements. And interesting arrangements they’ve proven to be.
Authorised by Paul Erickson, ALP, Canberra.