Day 459: 'Politics, not policy'
Counting the days since the banking royal commission was established.
Good afternoon, and welcome to day 459.
Today in summary: Labor Senators flag multiple issues with proposed Consumer Data Right legislation, but fail to offer amendments; finance brokers say the post-Hayne credit squeeze is unfairly hurting small business; and the government commits an additional A$3.7 million for rural financial counselling.
-- Charis
Current banker panic level: 😫 🤥🤑
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The Senate Economics Legislation Committee has recommended the Consumer Data Right bill be passed, paving the way for its introduction in the April sitting of Parliament. In its report released this afternoon, the Committee, chaired by Victorian Liberal Senator Jane Hume, acknowledges consumer and privacy issues with the bill, but says in one sense it’s an enhanced privacy regime.
“The committee notes that the timing of the initial roll out has been adjusted to allow for more time for consumer testing in the period from July 2019 to February 2020. With that in mind, the committee is confident that the timing for the implementation of the CDR is feasible.”
Labor Senators disagreed, arguing the whole policy development process had been rushed, pointing to a similar view given by both the Law Council, and the Business Council of Australia.
“Labor Senators believe it is politics, not policy that are driving these compressed timeframes, a government desperate to get a headline, but have failed to deliver the substance behind the headline.”
As a result, they said there were not yet in a position to provide detailed amendments.
Adelaide Bank has become the latest lender to tighten requirements for small business borrowers who want to secure their loan with property. One finance broker told the AFR the lending squeeze was self-imposed by the sector, as opposed to coming from the regulators.
"This is resulting from lenders' misinterpretation of what regulators want based on what happened to consumer lending."
The comments come after Reserve Bank assistant governor Michele Bullock yesterday used a speech in Perth to urge banks to continue lending.
“My hope, now that the royal commission has finished, and now that the Australian Prudential Regulation Authority has finished and is removing its benchmarks, is that banks will start to lend again.”
Meanwhile, the AFR released the results of a survey finding eight in 10 SMEs have or expect to find it more difficult to get the finance they need in a weakening property market.
The Coalition government has committed and additional A$3.7 million to the Rural Financial Counselling Service, bringing the total government funding for the group to A$77 million. It says since August the service’s hotline has received more than 1,300 calls for assistance from drought-affected farmers.
Today’s burn prize: Magistrate Michael Barko
🔥🔥🔥
“You would have to live in a vacuum to not understand that taking another person’s identity is unlawful.
“Not being familiar with Australian law at the time of the offence … what a load of nonsense.”
His Honour sentenced former AMP contractor Yi Zheng to 180 hours community service for trying to steal the identities of 20 AMP customers, and then claiming he didn’t know identity theft was a crime.
The Commentariat
The New York Times editorial board welcomes the US Fed’s decision to hit the pause button on interest rate rises for the rest of the year, but warns against its continual “chipping away” at financial regulation.
“Barely a decade has passed since the recklessness of major financial institutions helped to catalyze the largest economic crisis since the Great Depression. Many Americans have yet to recover their losses. Yet somehow, the lessons of the crisis already appear to be fading.”
AMP shareholders are unlikely to be entirely satisfied by Chairman David Murray’s move to cut bonuses ahead of this year’s AGM and a potential second strike, writes the Sydney Morning Herald’s Elizabeth Knight.
“Former chairman Catherine Brenner and ex-chief executive Craig Meller have long left the AMP building, but their legal ghosts remain. The wealth management giant revealed in its annual report that it paid their combined legal fees of more than $316,000 in 2018 under the company’s indemnity insurance.
“AMP has also indemnified its auditor, Ernst & Young, against claims by third parties arising from its audit. While this protocol is not unusual, sections of the shareholder community may well voice a different view when the company holds its annual general meeting in May.”