Senator the Hon Mathias Cormann
Minister for Finance
Deputy Leader of the Government in the Senate
Senator for Western Australia
KIERAN GILBERT: The Commonwealth Bank scandal has gone global. Sky News has revealed billions of dollars of transactions in the US, Europe and Asia were not properly monitored. It means the bank might have breached anti-money laundering and terror financing laws in other countries too. Let’s go to the Finance Minister Mathias Cormann. Your reaction to this news broken by Sky News Business about the international implications of the lack of governance within the CBA?
MATHIAS CORMANN: This is the latest very serious allegation in a series of serious compliance issues and allegations that have emerged from the Commonwealth Bank for some time now. In an Australian context, regulatory action is underway. We have the Australian Prudential Regulation Authority initiating a review into governance, culture and accountability frameworks and practices at the CBA. We have ASIC investigating whether CBA has complied with its continuous disclosure and licensing obligations. We have AUSTRAC pursuing CBA in relation to anti-money laundering provisions related alleged breaches in the Federal courts. In an Australian context we are taking action. This is now a further dimension. What it shows is that clearly the Board and the management at the CBA has got some serious work to do.
KIERAN GILBERT: Indeed it does. Obviously, it is hard to speculate exactly how this could has all gone wrong. But hard to imagine how such big company, such an important company within this country has allowed itself to become so vulnerable on these fronts?
MATHIAS CORMANN: There is no sugar coating this. This is a very serious issue. It goes to the heart of the credibility of a very important financial institution in Australia. That is why the Government has welcomed the independent review initiated by APRA to look very closely at the governance, culture and accountability frameworks and practices at the CBA. We believe that that will be an incredibly important exercise.
KIERAN GILBERT: And in terms of the international regulators as well, have you got any sense of just how broad that scrutiny might be as well. Given this is not just something which is effecting these money laundering concerns in Australia now, it’s Asia, United States, UK.
MATHIAS CORMANN: We have a very comprehensive regulatory response in place here domestically in an Australian context. What other regulators in other parts of the world might or might not decide to do in relation to this is a matter for them. But in an Australian context we are taking this very, very seriously indeed.
KIERAN GILBERT: Is there any requirement from Australia within say the G20 and the various mechanisms that were put in place in the wake of the GFC that could see the bank and our institutions vulnerable in that sense?
MATHIAS CORMANN: We have a very strong banking system in Australia. We have a very strong prudential regulation framework. In an Australian context, all of the appropriate and necessary regulatory responses are underway. We are very confident that they will lead to the appropriate conclusion.
KIERAN GILBERT: Let’s turn to some other matters now and this cashless card. According to the report in The Australian today, the Government is going to detail quite a success story in relation to these trial sites. Can you explain some of the detail for us?
MATHIAS CORMANN: This cashless welfare debit card has operated in two communities now for some time. There has been an independent evaluation. What that independent evaluation has shown is that it delivered very positive outcomes in the communities in which it operated. In particular, it led to a reduction of alcohol and drug abuse. It led to a reduction in problem gambling. It lead to a reduction in related violence in those communities. What the Government is announcing today is the expansion of the cashless debit card to another community, the WA Goldfields. That is at the request and with the support of community leaders in that region and given the very successful evidence that came out of the independent evaluation.
KIERAN GILBERT: Do you think you need the community buy-in to make these trials viable though?
MATHIAS CORMANN: Sure. We are going into the WA Goldfields region with the support and at the request of community leaders. But the evidence is in. We would like to think that communities across Australia who are struggling with the impact of alcohol and drug abuse, gambling and the related violence, that sadly is too prevalent in many of these communities, that community leaders in communities across Australia will want to embrace this as an opportunity in the future.
KIERAN GILBERT: In terms of this approach, it is quite a heavy handed approach in terms of the drug testing and so on for welfare recipients, those trials that are being put in place. Are you worried that the Government is overstepping the mark in some regards here. Obviously not every case is suitable for these sorts of responses.
MATHIAS CORMANN: You are now talking about a separate trial. That is a drug testing trial which we are also initiating as a result of this year’s Budget, which is all about helping long term young unemployed to get back into work. The evidence is that many of these young people, the long term young unemployed are struggling with drug addiction. What we would want to do is to ensure that they are helped into appropriate support services, treatment services so that one of the issues that is preventing them from getting a job can be successfully addressed. Now, we will give this a try, we are trying it out, the same as we did with the cashless debit card. If it works, we will want to expand it.
KIERAN GILBERT: Let’s look at a couple of other matters now, in terms of the energy debate. This week we have seen the latest step in terms of power bills. Really, the big game in terms of Government policy is the 50threcommendation, the remaining recommendation of the Finkel Review that the Government has not come up with a response yet to and that is the Clean Energy Target. In terms of Labor’s position, they look like they are holding out a bit of an olive branch to the Government. They wouldn’t necessarily see an expansion to clean coal as a deal breaker. That must be something of a positive sign in your view Minister?
MATHIAS CORMANN: We are working our way through this carefully. We will continue to assess the best way forward. Our objective is to put downward pressure on electricity prices, to ensure that we have reliable and secure energy supplies and that we can do that in a way that helps us still meet our emissions reduction targets that we have signed onto in Paris. There is still some more work to be done. My friend and colleague Josh Frydenberg is leading that work for the Government and we will make a judgement when we have gone through that process.
KIERAN GILBERT: Sounds like it will be sooner rather than later. The Prime Minister talking about by the end of the year. Are you confident you can bring everyone with you as a leading conservative within the Party room? Are you confident that you can placate those who want coal to remain a feature, potentially a new coal power station as well into the future?
MATHIAS CORMANN: I am very confident that all Liberal and National Party Members and Senators are in favour of lower electricity prices and increased reliability of our energy supplies. We are committed to doing so in a way that helps us meet our emissions reduction targets. The specifics, we continue to work our way though. There is a body of work to be done. That is happening. As soon as possible, but we will take as long as necessary and we will do it as quickly as we can.
KIERAN GILBERT: In terms of Government roles in the clean coal. What is your view on that, are you open to Government financing support or incentives in that sense?
MATHIAS CORMANN: We have said all the way through and the Prime Minister has made it very clear that we are technology agnostic. Our focus is on ensuring that our energy policy framework helps us deliver the lowest possible prices, the best possible energy reliability and security and that we do so in a way that helps us meet our emissions reduction targets. That is what we continue to be focused on and that is what all of us in the Government are focused on.
KIERAN GILBERT: Finally, report by the Herald Sun today. The two major parties, both the Labor and Liberal Parties receiving funds from individuals involved with the Australian Council for the Promotion of the Peaceful Reunification of China. Referred to as a shadowy front for the Chinese Government in the Herald Sun. Have you got any information that you can share with us in this sense? Are you comfortable with the Liberal Party receiving funds of this sort?
MATHIAS CORMANN: I am very confident the Liberal Party receives funds consistent with our existing electoral laws. The Government has indicated that we intend to ban foreign donations for elections, for political campaigns. The Prime Minister has made very clear, we only want Australians and Australian businesses to influence election decisions. We are currently working our way through putting legislation together to give effect to that. Both in terms of donations to political Parties, but also donations to activist organisations involved in political campaigns in the context of elections.
KIERAN GILBERT: It is tricky though in circumstances like this one reported in the Herald Sun because while there might be some link to an offshore entity like this Chinese linked group, some of the heavy hitters involved are Australian citizens, despite their Chinese descent.
MATHIAS CORMANN: If you are an Australian citizen you are absolutely entitled to participate in the democratic process in Australia. We are carefully considering how best to make this happen and we have indicated that we would like to introduce legislation to ban foreign donations by the end of the year.
KIERAN GILBERT: Minister, thanks for your time. We will talk to you soon.
MATHIAS CORMANN: Always good to talk to you.