COMMITTEES

Senator BRAGG (New South Wales) (17:35): I rise to make some remarks in relation to the Senate Economics References Committee report into the Australian Securities and Investments Commission investigation and enforcement. The government have taken the best part of 2½ years to respond to the Senate committee report, which was tabled back in July 2024. That particular inquiry ran for a couple of years, and it was an inquiry into the capacity of the Australian Securities and Investments Commission to enforce the law, because the Senate took the view that there was a problem with white collar crime in Australia back in 2022 when it commissioned the inquiry.

The review found, through its evidence, that this was a systemic problem—that the ASIC had failed in its mandate to enforce the Australian securities and investments laws and that there were so many cases where people had identified wrongdoing and reported it to ASIC and where ASIC had not been able to deal with it in an expeditious manner. The result of the Securities and Investments Commission not acting swiftly resulted in significant harm—significant losses of people's wealth and impacts to people's mental health.

This was a significant, systemic failure of ASIC. I want to be careful in apportioning blame to ASIC itself. I do believe that the report uncovered some serious cultural problems at ASIC that go back many years, but it is also true that the parliament itself has continued to add to ASIC's mandate over these past couple of decades.

Every time there is a new problem, ASIC gets a new wing built onto its mansion. Every time there is a failure, governments of any colour decide that they will commission new laws which ASIC must then enforce. The net result of this situation is that Australia has now developed the broadest companies and investment regulator anywhere that we could find.

It is enormous. And I wonder whether it is possible for a lumbering organisation of that size to ever achieve its aims, as set out by this parliament. The fact that ASIC is so big is, I believe, one of the reasons that it has not been a successful agency.

There are a number of issues that the report identified around the delegation of responsibility—who's actually on the hook for which part of the sector they might be responsible for regulating—but, ultimately, when it came down to the final report, what was most telling was that there were many people who went out of their way to warn ASIC about breaches of our Corporations Act or other laws and those warnings were lost.

In one case, the insolvency practitioners' industry body—which has standing with the securities regulator—indicated that they knew that there were people who were doing business who had been effectively debarred. That piece of paper was lost. It's like 'the dog ate my homework'.

Then there was the case of Melissa Caddick running an unlicensed financial services business. She was an unlicensed financial adviser. There were many warnings provided to ASIC by licensed financial advisers, saying, 'Look, this person is running a business without a licence.' Nothing happens.

I was very sad that, while this report was being written, there were clearly problems happening—where ASIC was failing again. Now we sit in 2026, some two years after the report was tabled, and we can see First Guardian, Shield and Lion. These were significant financial collapses where people had invested into these businesses thinking that they had the rule of law to protect them.

In all those cases, there were warnings issued to the securities regulator that the people running these businesses were doing things which were in some form contrary to our laws and, in some cases, were running a business without a licence and in other ways were receiving conflicted remuneration which they should not have been accepting. In other cases, they were engaging in fraud.

These warnings were provided, but they were not acted on in a swift way. We have over the course of the last two years interrogated these cases with ASIC at Senate estimates. They would say, and I don't wish to verbal them in any way, that they have acted appropriately and that they have enforced the law.

In some cases that may be true, but they took a very long time to do it. Think of the way that the US's SEC has been able to deal with some of the people who have transgressed the laws in the United States. They have dealt with people swiftly.

People will find themselves in the clink within a year of their transgressions being exposed. In Australia, you'd be lucky if they hit the clink 10 years after their misdeeds are exposed. The Commonwealth department of public prosecutions has seen, over these last five or six years, a reduction in the number of prosecutions achieved by ASIC which have resulted in custodial sentences or criminal penalties being issued by a court.

That is very telling. With all the additional resources, the bigger scope of ASIC and all the white-collar crime that still goes on, we see fewer people in the clink. I just think we don't have enough deterrence.

People are not afraid of ASIC. That's why, in seeking to make this contribution this evening, I ought not to be too political. But I would say that two and a half years is a long time to wait for a government to respond to what was a substantial Senate inquiry.

We had extensive public hearings. We made, I would say, some recommendations which may have been controversial but others that were not, including in relation to whistleblowing. It took the government two and a half years to consider their response, and their response was nothing.

Their response was, 'You can stick your recommendations where the sun doesn't shine.' That was their response. If you go through the recommendations, they are effectively a technocratic set of recommendations which are not political. They're not an attack on the Labor Party and their terrible government.

They are simply an assessment of what went wrong with ASIC and how it could be fixed. The fact that this treasurer, Mr Chalmers—or Dr Chalmers, as I think he likes to style himself—has come to the position that he wouldn't dignify the report with a response for two and a half years and, when he did, rejected all the recommendations without any proper basis I think shows you how small our politics can be when you consider the collegiate way that a lot of these Senate committees are conducted.

I think that was a disappointing moment. We didn't get a proper response. So I say to the government: the future financial collapses that occur on your watch we lay at your feet.

We have done a thorough review of ASIC. We have found that it is not fit for purpose. It should be split up.

It should be properly resourced and governed in a way which makes it a hungry law-prosecuting machine that is able to sustain prosecutions and put white-collar crooks in jail where they belong—not coming back and phoenixing again but going to jail at Long Bay or whatever and not coming back again. That's the system that we have tried to recommend to this government, which they have rejected.

We regret that this will be a task for a future government. I remind the government again that you have shown the victims of these financial crimes how you regard them and how important these issues are to you—you put them at the bottom of your to-do list. It took you 2½ years to respond, and it was a frankly callous response to a set of issues which have destroyed people's finances and, in too many cases, also their physical and mental health.

Question agreed to.