War and democracy – who decides?


John Keane, University of Sydney

In March 2003, the Howard government involved Australia in an illegal military invasion of Iraq. The consequences of that war continue to be devastating for the people of Iraq and the wider Middle East. The prime minister was able to opt for invasion because in Australia the sovereign power to take the gravest decision, the commitment of the Australian Defence Force to international armed conflict, rests with the executive – in practice, often the PM alone – rather than with parliament.

Since 2014, further military deployments have taken place in Iraq. The bombing of Syria continues. Several months ago, the prime minister announced unqualified support in principle for the United States in possible military action against North Korea.

All these developments reinforce the dangers typically associated with secretive small-group decision-making. Closed decision-making breeds hubris; and hubris, the friend of folly and recklessness, often results in disasters. All are a curse for democracy. That is why the Sydney Democracy Network, in partnership with Australians for War Powers Reform, convened a public forum on the subject of the urgent need for war powers reform.

Held on the International Day of Peace, September 21, War and Democracy – Who Decides? featured contributions from Paul Barratt AO, president of Australians for War Powers Reform and former secretary of the Department of Defence; Professor Gillian Triggs, former president of the Australian Human Rights Commission (see her video below); and lawyer and activist Kellie Tranter, whose edited contribution follows.


When governments kill in large numbers they always do so for a good reason. We must be on guard against that. – Howard Zinn

Lawyer and human rights activist Kellie Tranter.
Lindy Baker/Sydney Democracy Network

Australian politicians talk about ending terrorism but they make decisions that carelessly or inadvertently stir the pot and radicalise people. This then reinforces the dominant public narrative and makes military incursions superficially acceptable. Unfortunately, vigorous debate in Australia is encouraged only within the limits imposed by “unstated doctrinal orthodoxy”, particularly in relation to foreign policy.

Not only are the people who control what we know determining our future, the government secrecy surrounding Australia’s historical record deliberately obfuscates our understanding of what is going on right now. Symptomatic is the way the Australian Defence Force (ADF) has recently been found to be one of the least transparent military coalition members in Syria. The ADF won’t reveal “where they bomb, when they bomb or what they bomb”.

Syria’s recent history reads like a contemporary illustration of Chris Clark’s conclusion in Sleepwalkers: how Europe went to war in 1914. The period analysed in that book shows that great powers had more than one enemy, and that executive decision-making was chaotic.

War was a consequence of decisions made in many places, with their effect being cumulative and interactive. These decisions were made by a gallery of actors who otherwise shared a fundamentally similar political culture.

On September 9 2015, Australia’s permanent representative to the United Nations, Gillian Bird, wrote to the UN Security Council president claiming that Article 51 of the UN Charter recognises the inherent right of states to act in individual or collective self-defence when an armed attack occurs against a UN member state. States must be able to act in self-defence when the government of the state where the threat is located is unwilling or unable to prevent attacks originating from its territory. Bird alleged that the Syrian government had, by its failure to constrain attacks upon Iraqi territory originating from ISIS bases within Syria, demonstrated that it was unwilling or unable to prevent those attacks.

Unauthorised and uninvited

The Australian government was not questioned about how Syria was unwilling or unable to prevent those attacks. It was not asked how airstrikes would affect the Syrian population and infrastructure.

There was no link between ISIS, a non-state actor, and Syria. ISIS was not acting under instructions from, or the direction or control of, the Syrian government. Western governments made no attempt to work with the morally disgraceful Assad regime to actually enable it to prevent attacks emanating from its territory (and indeed Australia didn’t recognise the legitimacy of the regime).

Moreover, the Syrian government didn’t invite us to carry out airstrikes in Syria, and there was no UN Security Council resolution authorising the use of force. Neither the Australian government nor the opposition provided a clear explanation about why in August 2015 there was no clear legal basis for Australian involvement in Syria, but by September 2015 there was.

There was no rational discussion about our strategic ends. There was certainly no mention of the fact that in 2014 we already had embedded ADF personnel in Florida contributing to operations against ISIS in Syria.

There was, however, a letter, dated September 17 2015, from the Syrian government to the Security Council. The mainstream media did not report it, but the letter was referred to in documents I received following FOI requests. The letter disputed Australia’s unwilling and unable claims and pointed out that the Syrian Arab Army had, over four years, been fighting ISIS, the al-Nusrah Front and other groups being supported by Turkey, Jordan, Saudi Arabia, Qatar and Western states.

The letter called on others to co-ordinate with Syria. It said the international coalition led by the US had yet to achieve anything tangible in its war on terrorist organisations.

UN Security Council powers failed to alleviate the suffering of civilians as the conflict in Syria intensified.
Russian Ministry of Defence

The Syrian government had a point, particularly since US President Barack Obama had already told VICE News (on camera) that:

ISIS is a direct outgrowth of al-Qaeda in Iraq that grew out of our invasion in 2003, which is an example of unintended consequences.

Failing Syria

What was omitted from the political and public discourse in the lead-up to Australia’s decision to become involved in Syria was the fact that Syria had experienced a severe drought between 2007 and 2010. The drought spurred as many as 1.5 million people to migrate from the countryside into the cities, creating significant social and economic tensions.

In 2012 the UK’s MI6 co-operated with the CIA on a “rat line” of arms transfers from Libyan stockpiles to Syrian rebels after the fall of the Gaddafi regime. That same year, Russia proposed that Assad could step down as part of a peace deal. The US, Britain and France were so convinced that the Syrian dictator would fall that they ignored the proposal.

By this stage, the UN human rights commissioner had already confirmed 60,000 Syrian fatalities between March 2011 and November 2012. The current estimate is almost half a million deaths.

In September 2014 the US Congress determined that the US$500 million CIA program to arm Syrian rebels had failed. Arms had been ending up in the hands of the al-Nusra Front, and Jordanian intelligence officers were selling arms on the black market.

The following month, The New York Times reported that a CIA report had concluded that “many past attempts by the agency to arm foreign forces covertly had a minimal impact on the long-term outcome of a conflict”. The report came a month after Australia had delivered weapons to Kurdish Peshmerga fighters and a month before our successful delivery of 18,000kg of crated weapons from Albania to Erbil in Iraq.

On March 21 2015, international aid agencies and human rights groups released the Failing Syria report. This found that UN Security Council powers had failed to alleviate the suffering of civilians as the conflict intensified.

Two months later, the International Crisis Group released its own report warning that military aid had been given without an underlying strategy, which would prolong the battle with ISIS and inflame other local conflicts between intra-Kurdish rivals. The report noted that the US-led coalition had remained silent about Kurdish land grabs in disputed territories.

In May this year, Amnesty International urged the US and other countries to stop arms transfers that could fuel atrocities. This followed confirmation by a US Defence Department audit that the army had failed to monitor over US$1 billion worth of arms and other military equipment transfers to Kuwait and Iraq, which have ended up in the hands of ISIS.

A show for the domestic audience

In August 2015 rumours began to circulate that the then prime minister, Tony Abbott, had pushed for the US request to join airstrikes in Syria. Only five days before the bipartisan decision was made, Amnesty International reported that 220,000 people had been killed in Syria. Another 12.8 million needed humanitarian assistance and 50% of the population was displaced.

Still, at a reported cost of A$500 million a year for our air war against ISIS, and regardless of international law, we were first in with the US, beating our British counterparts who delayed plans for a parliamentary vote. A number of military strategists were of the view that Australia’s involvement was a show for the domestic audience.

The irony, of course, is that six days after the decision to conduct airstrikes in Syria, we had a new prime minister. Shortly after that a document titled “ADF Operations in the Middle East” was produced in response to my FOI request. It confirmed that “the prospects for a political or military solution are poor”.

The word “poor” seems highly inadequate. In order to supply arms to Syrian rebels, the Pentagon relies on an army of contractors from military giants to firms linked to organised crime. Saudi Arabia (a Western ally) and Qatar are providing clandestine financial and logistical support to ISIS, while Iran and Russia support Assad. Turkey is fighting the Kurds and the US-supported opposition groups, but is fighting with Russia against ISIS.

There are drone strikes and bombs being dropped by the US, Belgium, Jordan, Netherlands, Bahrain, Saudi Arabia, United Kingdom, France, United Arab Emirates, Turkey, Israel, Denmark and Australia. There is disturbing evidence of the al-Nusra Front’s access to sarin gas. And to top it off, a Bulgarian journalist recently uncovered Azerbaijan Silk Way Airlines offering diplomatic flights to private companies and arms manufacturers from the US, Balkans and Israel and the militaries of Saudi Arabia, United Arab Emirates and US Special Operations Command to ship weapons around the world, including to Syria, without regulation.

Hidden agendas lead to humanitarian disaster

Our politicians continue to support the US, an ally that has historically forsaken the exploration of peaceful means and diplomatic solutions in favour of force and aggression. Under the pretext of responding “with decency and with force” to humanitarian concerns and the responsibility to protect civilians, Australia extended airstrikes into Syria.

Confirming he is considering airstrikes in Syria, Tony Abbott tells parliament Australia will respond ‘with decency and with force’.

Decency? Every war is a war on children when armed conflicts kill and maim more children than soldiers. Perversely, more soldiers die from suicide and peacetime incidents than war.

And then there’s the matter of secrecy. On January 6 2017, I issued an FOI request to the Defence Department for copies of documents confirming or specifying the dates, locations and outcomes (numbers of military and civilian casualties) of airstrikes by Australian forces in Syria. On January 20 2017, I received an email simply confirming that “the Department does not specifically collect authoritative (and therefore accurate) data on enemy and/or civilian casualties in either Iraq or Syria and certainly does not track such statistics”.

For all the political protestations about concern for civilian lives, we are not even trying to count our victims. To date, we have only claimed responsibility for the deaths of Syrian soldiers in airstrikes in September 2016.

This year, as if Australia wasn’t already an aircraft carrier for the US, the government decided to sell military equipment to Saudi Arabia. Overnight, Defence Industry Minister Christopher Pyne became a dedicated arms salesman, announcing that he wanted Australia to become a major arms exporter on a par with Britain, France and Germany, and to use exports to cement relationships with countries in volatile regions such as the Middle East.

Then US Defence Secretary Ash Carter greets Marise Payne and Christopher Pyne at the Pentagon in 2016.
Amber I. Smith/US Defence Department

Perpetual war has devastated the Middle East. Others rightly argue that a government that devotes the bulk of its budget to arms manufacturing implicitly makes a moral decision that militarism is more important than the creation of well-being for the population.

The difficulty is that Australians still aren’t told the truth about why we became involved in Syria. Those decisions seem to have been made in furtherance of unstated international coalition agendas rather than on open and objective assessments of their merit. This state of affairs is made profoundly worse by the fact that the decision to go to war was an executive decision, not a decision made democratically after full and open parliamentary debate based on the best objective information available.

We are fighting a difficult battle for transparency in these disturbingly Orwellian times, but the battle can and should be waged for as long as we have the will and the means to do so. Our best weapons are an accurate historical and geopolitical perspective and truth.

The ConversationWhen it comes to war, our government needs to be more transparent and to open up decision-making on whether to become involved. Politicians and military personnel must be accountable for the human consequences of what they perpetrate in our name. It is our collective responsibility to do what we can to hold them to account.

Professor Gillian Triggs at the Sydney Democracy Network and the Australians for War Powers Reforms public forum.

John Keane, Professor of Politics, University of Sydney

This article was originally published on The Conversation. Read the original article.

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At APEC, Donald Trump and Xi Jinping revealed different ideas of Asia’s economic future



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Prime Minister Malcolm Turnbull (front left) joins other world leaders for the APEC summit in Danang, Vietnam.
AAP/pool

Nick Bisley, La Trobe University

Donald Trump has just attended his first APEC leaders’ summit following bilateral state visits to Japan, South Korea, China and Vietnam. After the NATO summit and G20 earlier in the year, in which he displayed his inexperience and lack of affinity for multilateralism, many feared the worst.

But the comfortable rapport he established with leaders like Japanese Prime Minister Shinzo Abe, Chinese President Xi Jinping and South Korean President Moon Jae-in, as well as the less formal structures of APEC, meant there was no repeat of the northern hemisphere summer.

APEC was established in 1989 with the leaders’ summit added in 1994, with an ambition to drive economic co-operation and in particular trade liberalisation across the region. While it has been modestly successful in the unglamorous area of trade facilitation – involving largely regulatory streamlining to make the business of international trade smooth – as a co-operative framework it has not achieved any major outcomes.

So when looking at APEC, the real interest is not on the grouping’s economic policy process, but what occurs on the platform that the leaders’ summit provides, as its convening power remains impressive. What did we see in 2017?

Once again, APEC was a forum for discussing a non-APEC trade agreement. The TPP had regularly figured in previous meetings, and this time the 11 remaining members met to try to craft an agreement without the US. Canadian Prime Minister Justin Trudeau failed to attend one of the meetings, but it does appear that the 11 have salvaged some kind of a deal.

A string of meetings occurred on the sidelines. Of greatest interest was Trump’s conclave with Russian President Vladimir Putin, mostly focused on relationship-building, particularly important given the slate of new leaders in the club. New Zealand Prime Minister Jacinda Ardern, Moon, Hong Kong’s chief executive Carrie Lam and Taiwanese President Tsai Ing-wen were all making their debut.

Despite the evidently warm personal relationship that Trump has developed with Xi, the smiles and diplomatic tourism in Beijing are the pleasant facade of what has become a more overt competition for influence in the region. At the 2017 iteration of the meeting Gareth Evans famously described as “four adjectives in search of meaning”, this was plainly in sight.

At keynote speeches to the APEC CEO summit, Xi and Trump laid out their views on the region’s future. Trump’s speech was the second setpiece, following Rex Tillerson’s speech at CSIS in October, which outlined a belated US strategy to the region. The US aims to sustain a “free and open Indo-Pacific”, and Trump’s focus at APEC was on the economic dimension.

Continuing the themes raised in his UN General Assembly speech of September in which Trump declared he expected all countries to pursue their own interests first, he continued his walk away from core principles of its economic engagement of the region. In the past it had pursued large scale multilateral agreements, initially chasing a big free-trade agreement of the Asia Pacific, and more recently the TPP.

Trump said very plainly that there would be no more big agreements, and only bilateral deals based on strict and fairly narrow ideas of reciprocity. The other notable element was a direct statement that the US would no longer put up with predatory practices of other countries, such as IP theft, subsidies and not-enforced trade rules. While he did not name China as his main concern, he didn’t need to.

Trump’s effort to reconcile US rhetorical commitment to an open economic order in the region with his mercantilism stood in contrast to Xi’s approach. Xi painted a picture that seemed much more in keeping with the longer-run trends in Asia’s economic order.

Xi repeated the promise made at Davos that China was committed to economic openness. More specifically, he said China would seek to make economic globalisation more open, inclusive and balanced.

Interestingly, he said China would uphold regional multilateralism as the best means to advance the region’s common interests that were “interlocked”. He also presented the “Belt and Road Initiative” as an open mechanism that would help advance regional connectivity and even, somewhat surprisingly, described it in fairly economically liberal terms.

To be clear, Xi’s speech was a declaration of what China would do – whether it actually follows through is an open question. Nonetheless, Xi presented a China that would lead an open and inclusive economic order, in some ways as a defender of the status quo. Trump, in contrast, seemed to break with that tradition. Trump’s economic nationalism was on display, and he encouraged others to follow his lead.

Quite where this leaves the region is unclear. We still have to wait to see whether the two speeches of the “free and open Indo-Pacific” becomes an actual strategy. US policy remains hindered by a lack of resourcing in key branches of government.

The ConversationEqually, we have to wait to see what China will actually do. But make no mistake, at APEC 2017, the region’s two biggest powers presented clearly different visions of the region’s economic future.

Nick Bisley, Executive Director of La Trobe Asia and Professor of International Relations, La Trobe University

This article was originally published on The Conversation. Read the original article.

Explainer: what exactly is a living wage?


Joshua Healy, University of Melbourne and Andreas Pekarek, University of Melbourne

Australia’s national minimum wage should become a “living wage”, according to a new campaign from the Australian Council of Trade Unions (ACTU). But what exactly is a living wage?

In theory, a living wage is no different to a minimum wage. Both set a binding “floor” on wages, below which no employee can (legally) be paid. But in practice there are several differences between minimum and living wages, in their value, purpose, and adjustment.

A living wage is set higher than a minimum wage and may be “pegged” to (fixed as a percentage of) some other measure of living standards, such as average weekly earnings. This ensures that the living wage holds its relative value over time.

Essentially, while the minimum wage sets a bare minimum, the living wage aspires to be a socially acceptable minimum. Typically, this is seen as a level that keeps workers out of poverty.

But the point at which workers fall into poverty varies widely, due to differences in family responsibilities, and complex interactions between low wages and welfare payments. These factors necessarily affect how the level of the living wage would be set and adjusted.

The idea to shift to a living wage follows a string of bad news about pay. Many vulnerable workers have been denied their minimum entitlements by employers. Wage growth is so slow that even the Reserve Bank Governor has encouraged workers to demand pay increases. And workers are getting less of the national income, as capital owners increase their share.

Living vs. minimum wages

Australia’s national minimum wage is set each year by an expert panel of the Fair Work Commission (FWC). The panel receives submissions from a wide range of organisations and conducts research to inform its decisions.

Increases to the minimum wage are based on objectives enshrined in law. These refer to different factors, including business competitiveness, employment growth, and the needs of the low paid. There is no specific mention of poverty in the current objectives. Nor is there a fixed relationship with any other measure of living standards.

In other countries, minimum wages and living wages co-exist. In the United States, long periods can pass without increases in the federal minimum wage, as there is no mechanism for its regular adjustment. This has led many local governments to set their own mandatory living wage ordinances, above the federal (and state-level) minimum wages.

The situation is different in the United Kingdom, where the Low Pay Commission recommends a national minimum wage increase each year. Even there, the movement for a voluntary “real living wage” has strong support from employers.

If the ACTU plan became law, Australia’s living wage would differ from the US and UK models. It would replace, rather than complement, our national minimum wage, substantially raising the wage floor. This would require the FWC’s expert panel to have different wage-setting objectives, with its primary goal being to eliminate working poverty.

Would a living wage help the poor?

Regrettably, poverty is the reality for many of Australia’s lowest-paid workers. Some struggle to make ends meet and go without basic necessities, such as meals and heating – particularly those in single-income families.

Neither our current minimum wage, nor the proposed living wage, is a pure “anti-poverty” tool. This is because the poorest people do not have paid jobs – often due to serious socioeconomic disadvantage. A living wage only helps those who rely on paid work (their own or someone else’s) for an income.

The intention of a living wage is therefore not to eradicate all poverty, but to end poverty among those who work – “the working poor”.

This laudable ambition is complicated by differences in personal and family circumstances. A living wage cannot vary from person to person, yet low-paid workers are not all alike: some live alone, some have children, and many are in dual-income families.

Who should a living wage be set for? The income needed to prevent poverty is inevitably much higher for workers with families than for those who live alone.

The Social Policy Research Centre (SPRC) produces “budget standards” that show the minimum income required by different types of families to reach a healthy living standard. Their evidence has been widely used by the ACTU and other advocacy groups in submissions to the Fair Work Commission.

According to their analysis, an employed single adult currently needs A$597 per week (before tax, and including housing costs) to live healthily. A couple with two young children needs almost twice as much: A$1,173.

The national minimum wage is currently A$695 for a full-time worker. So, according to the SPRC’s research, that worker already earns enough for a healthy life if they live alone, but not nearly enough if they have a family. This highlights the difficulty of setting a single living wage that would universally prevent working poverty.

Families with children also receive other government assistance through targeted welfare payments. This further complicates the task of setting a living wage.

What are the alternatives?

There are other ways to tackle working poverty. In the US, an “earned income tax credit” reduces the taxes of low-paid workers, so their wages stretch further. Such a scheme has been recommended for Australia.

Another very different approach to welfare is a universal basic income (UBI). This would provide a guaranteed minimum income, regardless of whether someone works, and without eligibility tests like those behind Centrelink’s recent “robo-debt” debacle.

Supporters of UBI also see it as a solution to job losses caused by rapid automation.

Living wages and UBI are radically different ways of tackling poverty. Work remains vital for a living wage, but is optional for a UBI. A living wage would raise the value of paid work, but might make life harder for some jobseekers whose labour becomes more expensive. A UBI would provide income without work, which might encourage more people to drop out of the labour force altogether.

The ConversationIn pushing to “make work pay”, the ACTU is hoping to capture both the public imagination and, for workers, a larger slice of the economic pie.

Joshua Healy, Senior Research Fellow, Centre for Workplace Leadership, University of Melbourne and Andreas Pekarek, Lecturer in Management, University of Melbourne

This article was originally published on The Conversation. Read the original article.

Why are rates of domestic violence in Australia still so high?



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One in six Australian women have experienced partner violence.
Isaac Holmgren/Unsplash

Heather Douglas, The University of Queensland

Australian Bureau of Statistics (ABS) data released this week as part of the Personal Safety Study (PSS) reveals 16% of Australian women have experienced partner violence.

The 2016 PSS was conducted across Australia and surveyed around 21,000 people about their experience of violence. The PSS was last run in 2012, and before that in 2005, so it’s possible to make some comparisons across time.

The statistics show a mixed picture. Overall, the proportion of Australians who report that they experienced violence in the past year has declined from 8.3% in 2005 to 5.4% in 2016.

However partner violence remains high, especially towards women.


ABS

Around one in six women (16% or 1.5 million) have experienced physical violence by a partner, compared with one in seventeen men (5.9% or 528,800).


Read more: Study confirms intimate partner violence leading health risk factor for women


Women were much more likely to experience physical violence from a previous partner than a current one. Around 2.9% of women reported violence by a current partner, while around 14.6% of women experienced violence by a previous partner. There has been little change in the partner violence figures since 2005.

In the last few years, significant resources have been devoted to changing attitudes towards domestic violence – so why aren’t the numbers going down?

One answer may be that broader attitudes towards women and relationships need to change and this takes a long time. Campaigns like Let’s Change the Story and The Line focus on creating the deep and long-lasting cultural change that’s needed but it’s probably still too early to see results.

Another answer might be that some people are changing, and using violence less. But as we talk more about domestic violence, it loses the stigma historically attached to it. As a consequence, more people are prepared to name it and report it. This keeps the figures stable.

The ABS statistics show that some women* report violence by their intimate partners after separation rather than during the relationship. Of the women who reported experiencing domestic violence, 92.4% were living with their partner and 7.6% were separated.

This is no surprise. Leaving the relationship may threaten an abuser’s sense of control and violence may be one tactic used in an effort to reassert control or punish the victim for leaving.


Read more: Why doesn’t she just leave? The realities of escaping domestic violence


In 1990, Martha Mahoney coined the term “separation assault” in recognition of the phenomenon. Separation is now a well-known risk factor for heightened violence. In government death reviews, actual or intended separation is a characteristic of a high proportion of intimate partner homicides.

Risk assessment tools that police and support services use in safety planning now routinely identify separation as a key risk factor for further violence and death.

As we reduce the stigma of naming domestic violence we may see more women seek help.
Annie Spratt/Unsplash

Notably, while the ABS statistics have remained relatively stable, calls on services have increased significantly over recent years. Applications for domestic violence protection orders in Queensland have jumped from 23,794 in 2012-13 to 32,221 in 2015-16 – a 26% rise.

Similarly in Victoria, 74,551 family violence and personal safety matters were heard by the Victorian Magistrates Court in 2015–16. This was a 27% increase since 2011–12.

In Queensland, reports to police of breach of domestic violence protection orders have more than doubled between 2012 and 2017 and these have also increased significantly in Victoria.

According to annual reports, calls for support to Queensland’s domestic violence support line, DVConnect, have tripled between 2012 and 2016. Safesteps, Victoria’s domestic violence support line, has seen a similar increase.


Read more: Deaths after seeking help point to priorities in tackling domestic violence


Given the ABS reports that figures on domestic violence remain relatively stable, why is there such an increase in requests for support and services?

The ABS statistics are collected through a survey and include questions about seeking help.

The increased numbers of applications for protection orders, reports of breach of those orders and increased calls to support services might suggest that people are increasingly willing to seek help in response to the violence they are experiencing.

Perhaps some are choosing to leave their violent partners. Again, this increase in help-seeking may be explained in part by a reduced stigma associated with domestic violence and the increased willingness of people to name it.

Another explanation might be that services are improving their understanding of domestic violence and are getting better at screening for domestic violence and making appropriate referrals.

Whatever the reason for them, the relative stability of the overall statistics in the ABS study leave no room for complacency. The figures remain too high.

As we reduce the stigma of naming domestic violence we may see more women seek help, and when they do they will often be placing themselves at serious risk. We need to continue to develop and resource robust responses to individual perpetrators and appropriate support for victims.


The National Sexual Assault, Family & Domestic Violence Counselling Line – 1800 RESPECT (1800 737 732) – is available 24 hours a day, seven days a week for any Australian who has experienced, or is at risk of, family and domestic violence and/or sexual assault.

The Conversation* This article originally said higher number numbers of women reported violence by their intimate partners after separation than during the relationship. This has now been corrected. The article also been amended to reflect that the ABS survey included questions about help-seeking.

Heather Douglas, Professor of Law, The University of Queensland

This article was originally published on The Conversation. Read the original article.

The public should be ‘shocked, dismayed and disgusted’ at the major banks



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ANZ and NAB have settled with ASIC over manipulation of the Bank Bill Swap Rate.
Shutterstock

Pat McConnell, Macquarie University

The Australian public should be dismayed and disgusted that the major banks are still attempting to cover up the extent of their complicity in manipulating the Bank Bill Swap Rate (BBSW), a key interest rate benchmark.

For years, the banks covered up the involvement of their traders in manipulating not only interest rate but also foreign exchange benchmarks, by attempting to outspend the corporate regulator, ASIC, in the courts, using shareholders’ money.

Faced with publication of the evidence they caved in at the very last minute to settle with ASIC, paying even more shareholders’ funds, for fines and legal costs.

Has any director or senior manager taken personal responsibility, or even apologised, for either the rampant misconduct or the failure to monitor it – No!

Little contrition

In a short media release, ANZ acknowledged, with little contrition, that

in the course of trading on the BBSW market, a small number of traders attempted to engage in unconscionable conduct on ten dates between September 2010 and February 2012. ANZ also did not have in place adequate policies and systems to monitor trading and communications of its BBSW traders.

But we should not be fooled by the references to the “small number of traders”, or “ten dates”.

Last year, CBA and NAB agreed to enforceable undertakings with ASIC in relation to manipulating the foreign exchange benchmark, which was arguably much more egregious than the BBSW manipulation, as it involved sharing of information with other market participants, in particular sensitive information about clients’ trades.

Not one of the directors or senior managers of these banks took personal responsibility for the actions of their staff or their collective failure to monitor such obvious misconduct.

The agreement between ASIC, NAB and ANZ stipulates that

Traders involved in the breaches will have to be retrained before they are allowed back on their banks’ trading floors

Trading on nonpublic confidential information, which is what “manipulating the bank bill swap rate to their advantage and the disadvantage of others” was, is often punished by custodial sentences not some short court-ordered training course. This would just reiterate the rules that the traders should have been following anyway and which diligent management should have been enforcing.

The failure to monitor staff seems not to have slowed the progress of some senior managers. For example, ANZ CEO Shayne Elliot, was head of ANZ’s Institutional Bank (i.e. trading operations) during most of the period in which the unconscionable conduct took place.

Why did they pursue the court cases?

So what were the boards of directors of some of Australia’s largest companies doing while this failure to monitor unconscionable conduct was going on?

While neither superstar chairmen Ken Henry (NAB) nor David Gonski (ANZ) were in place during the original misconduct, they have been in place since 2014 and have had ample opportunity to inquire into the details of the scandal.

Having read the same evidence as Justice Jagot, directors chose to proceed with the case before caving in on the day it was due to be heard in court. Investors should be tearing their hair out at such colossal waste of money on high-priced (and in the end useless) lawyers.

The LIBOR and foreign exchange scandals cost overseas banks billions of dollars in fines.

Did they really believe this time was different, given that other banks had already pleaded guilty to manipulating BBSW? Even if they were not in place at the time, the non-executive directors of both banks are certainly responsible for continuing this expensive charade.

Such lack of oversight should surely trigger the first investigation when the new Banking Executive Accountability Regime (BEAR) legislation comes into force, as it covers directors and senior managers.

Pulling no punches

Federal Court Justice Jayne Jagot certainly pulled no punches in her statutory approval of the settlement between ASIC and the ANZ and NAB banks, saying that the Australian public should be “shocked, dismayed and disgusted” by the behaviour of the two banks.

The Australian public is right to be perplexed as to why no one considers themselves personally accountable for such a fiasco. And investors must be afraid that in pursuing the failed litigation so far, without apologising, that further harm is not done by possible class action litigation in the United States.

The Australian taxpayer would be justifiably annoyed to learn that the offences admitted by the banks took place between 2010 and 2012, when the very same banks were given the free handout of a government guarantee following the global financial crisis (GFC) – that really is biting the hand that feeds you.

So, should Australian investors, taxpayers and the public be “shocked, dismayed and disgusted” as the judge suggested? Yes.

The ConversationBut recent history suggests that the largest banks will just try to tough it out before returning to their previous modus operandi. Only a royal commission into banking regulation will break this vicious circle.

Pat McConnell, Visiting Fellow, Macquarie University Applied Finance Centre, Macquarie University

This article was originally published on The Conversation. Read the original article.

High Court strikes again – knocking out Hollie Hughes as replacement senator


Michelle Grattan, University of Canberra

The High Court has ruled out Liberal Hollie Hughes as a replacement for former Nationals senator Fiona Nash on the ground that she had an office of profit under the Crown during the election period.

Once again, the court has taken a very literalist approach to the Constitution. Hughes was appointed to the Administrative Appeals Tribunal this year but quit immediately after the court declared Nash ineligible to sit in parliament because she had been a dual British citizen when she nominated.

Hughes’ problem was that the election period is considered to extend until the seat is filled. The court did not accept the argument of Commonwealth Solicitor-General Stephen Donaghue that “the process of choice ends with the poll”.

Hughes was the next candidate on the Coalition joint ticket for New South Wales for the 2016 election and was set to get the position on the recount. The seat is now expected to go to Jim Molan, the following candidate on the ticket.

There would be some irony in his election because he had been pushed to an unwinnable position on the ticket, but still managed to get more than 10,000 votes personally.

Molan, a former senior military officer, was key in the shaping of the Coalition’s border protection policy.

He has been one of those at the forefront of the move within the NSW Liberal division to get a more democratic structure. He has put himself forward as a candidate for state president when the party’s state council meets in December to consider reforms that were passed by a rank-and-file convention earlier this year.

Molan said late on Wednesday that it was too early to say much about the Senate seat beyond “I believe I am eligible and I would take the job if it were offered”. He had no citizenship problems nor did he have any office of profit under the Crown, he said.

The ConversationThe High Court will publish its reasons later.

https://www.podbean.com/media/player/k3zus-7afe23?from=site&skin=1&share=1&fonts=Helvetica&auto=0&download=0

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Shorten goes for broke in byelection with mega stakes for Turnbull


Michelle Grattan, University of Canberra

Kristina Keneally’s entry into the Bennelong byelection has put more sizzle into a contest already up there as potentially one of the most significant byelections in recent years.

A decade ago Maxine McKew took the Sydney seat from John Howard, in the general election won by Labor.

If Keneally could wrest the electorate once again for Labor, the opposition would inflict a massive blow on the Coalition. Possibly one that would spell the end of Malcolm Turnbull’s leadership. A defeat would, in short, be catastrophic for the government.

On the other hand, if the swing against the Liberals was limited, that would help a besieged government and put some heart into its backbench.

Byelections can be seminal political moments. The Liberals’ loss of the Queensland seat of Ryan in 2001, with a 9.7% swing – the precise margin Bennelong is on – galvanised an embattled Howard. Retaining the Victorian seat of Aston a few months later (with a swing of only 3.7%) was seen as something of a turning point for the government.

In 2015, then prime minister Tony Abbott faced the Canning byelection in Western Australia, with the shadow of Malcolm Turnbull’s ambition hanging over him and warnings of dire consequences if the seat fell. When party polling suggested it would be saved, Turnbull pre-empted a positive result by launching his challenge before polling day.

John Alexander, 66, who fell foul of the dual citizenship crisis so creating this byelection, won Bennelong from McKew in 2010. The one-time tennis star hasn’t reached the frontbench and is rarely in the national news – though he did arc up on housing affordability.

But he is locally active and popular; in the difficult 2016 election he achieved a swing toward him. There had been speculation this might be his last term in parliament – he’d sold his home in the electorate – but now he’s committed to contesting the next election if he wins the byelection. He has said his move was downsizing and that he’s looking for an apartment in the seat.

Appearing with Bill Shorten on Tuesday, Keneally was careful to declare Alexander “a lovely guy”, though sloppy with his paperwork. He has to tie up his renunciation of British citizenship before nominating – presumably the UK bureaucrats are not dawdling.

In tapping Keneally to run, Shorten has both gone for the big hit and taken a gamble. The former NSW premier is well-known, media-savvy and campaign-hardened. She’s most recently worked for Sky; she’s in practice at talking a lot and thinking on the run. In political terms, she’s the quintessential star candidate.

But her background is from the bad times of NSW Labor politics, the days of Eddie Obeid and Ian Macdonald, both in jail, and Joe Tripodi. The Labor premier she displaced, Nathan Rees, said his successor would be a “puppet” of Obeid and Tripodi, to which she retorted “I am nobody’s puppet … I am nobody’s girl”.

The Coalition has an arsenal to use against her, and has immediately started to fire its bullets.

“Don’t let Kristina Keneally do to Bennelong what she did to New South Wales,” Turnbull said from the Philippines. “She is Bill Shorten’s handpicked candidate, so obviously Eddie Obeid and Bill Shorten have formed the same view about Kristina Keneally.” Ministers Greg Hunt and Scott Morrison had similar lines.

At this early stage no-one can be confident in predicting how this battle might go. There are more questions than answers.

To what extent can the Coalition exploit Keneally’s past if voters just want to lodge a protest against the Turnbull government? How far back will memories stretch, especially when there was no suggestion Keneally was corrupt?

Will state issues play into the campaign, and will the contest become more “local” as time goes on? How important will be the ethnic vote, in particular the big local Chinese community? Will voters sympathise with Alexander over his citizenship oversight, or will they mark him down for an unnecessary byelection?

The ABC’s election analyst Antony Green believes that despite the size of the margin “it’s a competitive contest given the polls and given the profile of Labor’s candidate”. As for Keneally’s past, “it’s the baggage of the current federal government that is the issue rather than the baggage of the state Labor government she led six years ago”.

Labor will run a well-resourced campaign. Shorten doesn’t have as much at stake as Turnbull, but once committed to a nationally known candidate and a high-profile campaign he would be burned by a poor Labor showing.

The December 16 Bennelong result will come after the December 2 New England byelection, which will return Barnaby Joyce, and the Queensland state election, where the outcome is uncertain. It will also follow the internal Coalition arm-wrestle over the detail of implementing same-sex marriage.

The ConversationEach will play into the government’s fortunes, but the Bennelong outcome might be the most important in how Turnbull goes into the new year.

https://www.podbean.com/media/player/k3zus-7afe23?from=site&skin=1&share=1&fonts=Helvetica&auto=0&download=0

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

The Trans-Pacific Partnership is back: experts respond


Deborah Gleeson, La Trobe University; Belinda Townsend, Australian National University; Kimberlee Weatherall, University of Sydney; Pat Ranald, University of Sydney, and Peter Robertson, University of Western Australia

The latest incarnation of the Trans-Pacific Partnership (TPP) is said to have “fewer bad bits”. But as our experts point out below, there’s still a great deal wrong with, or missing from, the regional free trade agreement.

The new TPP is informally known as the TPP11, after the United States pulled out of the original 12-country bloc earlier this year.

While the agreement has not yet been finalised, the 11 trade ministers have released a statement saying that the “core elements” have been agreed.

Twenty provisions from the original TPP have been suspended, but there are still a few areas to be worked out, including those relating to state-owned enterprises.

The Conversation’s experts respond:


Peter Robertson, Dean and Professor, University of Western Australia Business School:

Trade deals such as the TPP11 that include some countries and exclude others are inherently flawed mechanisms for extracting the most benefit from trade (also known as “gains from trade”).

All trade deals are about “swings and roundabouts”. That is, a redistribution of income from producers to consumers and governments. For example, when we remove tariffs on automobiles, then consumers gain but producers and their employees lose. When we impose a tariff on agriculture, consumers lose by paying higher prices at the grocery store and producers gain.

Under reasonable circumstances there is reason to believe that the sum of the gains exceeds the losses. But when you add up all the potential winners and losers from the TPP11, from an Australian perspective you end up with pretty much zero. Or, to be more precise, an 0.5% increase in GDP by 2030.

The gains are so small because the TPP11 diverts attention away from big trade issues like agricultural protectionism in Europe and the US, and focuses on smaller issues among a few countries who have mostly already liberalised every sector that is possible given the current political willpower.

From a global perspective the TPP11 could even have negative effects because it encourages us to buy from member countries, and not from outsider countries who may in fact have better and cheaper products.

The biggest winners in the world from current protectionist arrangements are the agricultural producers in Japan, the US and Europe where agricultural protection remains extreme and untouchable politically. We need trade agreements that focus on the big issues, not the small ones.


Pat Ranald, Research Associate, University of Sydney:

The TPP11 retains all provisions on Investor-State Dispute Settlement (ISDS) from the previous TPP, except for two narrow improvements which only apply if investors have specific contracts or authorisations with governments.

Despite claimed “safeguards”, ISDS enables all other foreign investors to bypass national courts and sue governments for compensation in international tribunals if they can argue that changes in domestic laws or policies harm their investment. The cases are tried by tribunals composed of investment lawyers who can continue to represent clients. There is no independent judiciary, and no precedents or appeals to ensure consistency of decisions.

Many of the 817 known cases involve public interest laws. Swiss Pharmaceutical company Novartis is suing the Colombian government over the plans to reduce prices on a patented treatment for leukaemia. The US firm Bilcon won its claim against the Canadian government for US$101 million after a provincial government refused to approve a quarry in an ecologically sensitive area. The French company Veolia is claiming compensation from the Egyptian government for a rise in the minimum wage.

Even if a government wins a case, defending it can take years and cost millions. The US tobacco firm Philip Morris shifted some assets to Hong Kong and used ISDS in an Australia-Hong Kong investment agreement to claim billions in compensation for Australia’s plain packaging law. It took more than four years and reportedly cost A$50 million in legal fees for the tribunal to decide that Philip Morris was not a Hong Kong company.

ISDS gives additional legal rights to global corporations to sue governments in unfair international tribunals, undermining democratic regulation in the public interest. Trade agreements should not increase corporate power at the expense of communities.


Kimberlee Weatherall, Professor and Associate Dean (Research),
The University of Sydney Law School

The TPP11 suspends the most controversial copyright provisions. But not everything controversial is out.

The TPP11 will no longer extend the term of copyright to 70 years after the author’s death – a big deal for Canada and New Zealand where copyright lasts 50 years after death.

It also suspends the anti-circumvention provisions, which means the TPP11 won’t make avoiding access measures (for example, technology that locks your ebooks or movies to a particular device) a crime. Although there’s a sting in the tail for Australia here – the TPP text on anti-circumvention is less restrictive than our free trade agreement with the US, and so we lose the benefit of that extra flexibility.

The incredibly complex safe harbours provisions are also suspended – this leaves members with more flexibility to adjust copyright in the digital environment (but also potentially means no protection for online service providers for the acts of their infringing customers).

Also suspended is a funny little footnote that might have given TPP11 authors a claim on payments from some cultural funds (such as Canada’s). However, a provision that encourages copyright to be balanced is not suspended, so that’s good news.

But there is still a cornucopia of enforcement procedures and remedies, and very broad criminal liability for infringing copyright – including liability for “aiding and abetting” others’ infringement. There are broad provisions that allow right holders to claim any equipment used to infringe copyright.

And, beyond copyright, the ministers haven’t suspended a controversial provision (a first of its kind internationally) on the theft of trade secrets, and they’ve retained some key provisions on geographical indications and trade marks that are going to complicate efforts by countries in the region to use geographical indications (such as “Manuka honey”) to develop local artisan and agricultural communities.

So while I’m happy to celebrate some realisation that the intellectual property chapter of the original TPP had serious problems, there is still quite a lot to dislike about what remains.


Deborah Gleeson, Senior Lecturer in Public Health, La Trobe University,
Belinda Townsend, Research Fellow, Australian National University:

The list of 20 items ministers have agreed will be suspended in the re-branded TPP includes several of the intellectual property rules for pharmaceuticals that were demanded by the US but deeply unpopular amongst the other TPP countries. These rules would have made medicines less affordable in the Asia-Pacific region.

Importantly for Australia, the provisions specifically targeting biologic medicines were on the list of suspended items. Our recent study found that this expensive class of drugs cost Australian taxpayers more than A$2.2 billion in 2015-16. Suspending the biologics rules means fewer barriers to making lower-cost treatments for conditions like cancer and rheumatoid arthritis available – at least for now.

Also suspended were rules requiring countries to provide patents for new uses, methods and processes of using existing products; extensions to patent terms; and what is known as “data exclusivity” – monopolies on clinical trial data submitted to regulatory agencies like the Therapeutic Goods Administration. These provisions would have primarily impacted developing countries, delaying access to generic medicines. They would also have cemented existing monopolies on new medicines in developed countries, including Australia – making it more difficult to reform our patent laws in future.

There is no doubt that suspension of these rules is a positive development. But simply putting them on ice for later implementation if the US re-joins the accord could just mean delaying their effects until a later time.

Despite the suspension of these specific items, there remain other provisions in the intellectual property chapter that could reduce access to medicines in the region. A better option than freezing a limited list of selected provisions would be to remove, or at least suspend, the whole intellectual property chapter.

There are many other parts of the TPP that could affect health, which have not been suspended or renegotiated. One example is the TPP’s alcohol labelling rules, which remain unchanged. These may create difficulties for countries wanting to mandate effective health warnings or other types of health information on alcohol containers.

Worse, there only seems to be some minor tinkering around the edges of the investment chapter being considered. The changes don’t appear to affect the chances that claims could be brought by corporations against governments over health and medicines policies. It’s a shame the TPP11’s negotiators haven’t taken the opportunity to exempt all health policies from potential investor-state disputes – tobacco control measures remain the only health policies that countries can elect to explicitly exclude.

There is still time for a more comprehensive reassessment of the TPP, including its likely impact on health and human rights: the agreement has not yet been finalised.

The ConversationSuspending a small number of the worst provisions doesn’t mean an agreement that is good for health.

Deborah Gleeson, Senior Lecturer in Public Health, La Trobe University; Belinda Townsend, Research Fellow, NHMRC Centre for Research Excellence in the Social Determinants of Health Equity, School of Regulation and Global Governance, Australian National University; Kimberlee Weatherall, Professor and Associate Dean (Research) The University of Sydney Law School, University of Sydney; Pat Ranald, Research Associate, University of Sydney, and Peter Robertson, Professor, University of Western Australia

This article was originally published on The Conversation. Read the original article.

Australia’s tenuous place in the new global economy


Richard Holden, UNSW

The Committee for Economic Development of Australia (CEDA) has released a report titled Australia’s Place in the World, which considered how Australia should respond to changing attitudes to globalisation.

At home and around the world, there is a backlash against free trade and globalisation. The report asks what course Australia should navigate through these choppy economic and political waters.

The backdrop, of course, is the UK Brexit vote and the election of Donald Trump as US President.

If that’s not motivation enough, one could easily add to CEDA’s list: the performance of Marine Le Pen in France’s recent presidential election, the election of the far-right AfD to the German parliament, and the looming role of Pauline Hanson’s One Nation in the Queensland election.

Tariffs and trade

The report is broken into three sections: Global Economy, Global Security, and Global Governance, but it is the first and third that speak directly to Australia’s economic fortunes in the age of Trump.

One obvious, but correct and important observation the report makes is that Australia has been a huge beneficiary of free trade over the past 30 years. Not only have our exporters gained access to major overseas markets, but consumers in Australia have also benefited from reduced tariffs.


Read more: With a free trade deal Australia can win China’s dairy market


For example, the price of a typical sedan has basically halved in real terms due to the removal of a 100% car tariff. But while trade and globalisation have made the economic pie bigger, the sharing of those benefits has been much more uneven. Just ask manufacturing workers.

What is missing from the report’s recommendations is how to deal with and compensate the losers from globalisation in Australia. That is important, both economically and politically.

Global rise of populism

The rise of populist parties around the world has been associated with this failure to compensate globalisation’s losers.

Part of what it takes to address this issue is so-called “place-based policies” which Rosalind Dixon and I have previously discussed. Broadly, this refers to the people who are affected when industries move away from particular areas and employment opportunities dry up.

The CEDA report argues, however, that:

Policies such as moving from transaction taxes on property to broad-based land tax to address housing affordability and labour mobility need to be designed along with transition pathways. GST reform with a broader base to remove the need for stamp duty could be another option.

The report also points out that Australia’s company tax rate is uncompetitive, and that the proposed shift to a 25% rate under the Coalitition’s “Enterprise Tax Plan” would only happen by 2026-27, if it happens at all. These are all good points, and would make for good policy. Yet the only one that looks vaguely likely to happen is replacing stamp duty with land tax – and that would be done at a state government level.


Read more: Lessons from Brexit: the fruits of globalisation must be shared with low- and middle-income groups


The federal government floated the idea of GST reform and retreated almost immediately after the opposition predictably attacked it viciously and effectively as being “regressive”. The Enterprise Tax plan also looks to be in danger, as several crossbench MPs seem likely to side with Labor and want tax cuts only for small businesses. That’s utterly stupid economics, but apparently good politics.

Middle power leadership?

As the report notes: “Global cooperation is growing increasingly important in a world that faces a number of crises that require cross-border solutions.”

This is surely true, although the report paints a rosy picture of Australia’s potential role as a “middle power”, claiming that we were important in the establishment of the United Nations.

True, Australia played a relatively important role in establishing APEC and the G20. But that involved leadership from figures like Hawke, Keating and Rudd. I, for one, don’t see anyone on the present political landscape with those leadership and persuasion skills.

Perhaps the bigger challenge is that President Trump seems determined to radically undermine international institutions. Even Canadian Prime Minister Justin Trudeau was unhelpful in the Trans Pacific Partnership rebound effort that Malcolm Turnbull and others were trying to arrange.

What can Australia do in the face of orchestrated attacks on global institutions by the biggest and most important nations? Very little, I fear. The age of Trump is a difficult time for Australia and its leaders. Many things are out of our control.

What we can do, however, is resist the tide of populism at home, and provide stable and functional government. Both major parties have a patchy recent record in that regard, and the federal opposition has made some populist-type moves on trade and protectionism.

The ConversationLet’s hope they don’t really believe it.

Richard Holden, Professor of Economics and PLuS Alliance Fellow, UNSW

This article was originally published on The Conversation. Read the original article.

It’s time for a royal commission into banking regulation


Pat McConnell, Macquarie University

The handling of recent financial scandals show that regulators are confused about what they do, or should do. And as a result the regulation of the financial system, which is vital to a strong functioning economy, is just not working effectively.

We can see the problem in the recent testimony to the House Economics Committee. Recounting the sequence of events that led the Commonwealth Bank to inform regulators of the alleged breaches of money-laundering legislation, CBA Chair Catherine Livingstone said:

We were having board meetings at the time I was being called to Canberra by the Treasurer. When the board meeting, which went over multiple days, finished, which was lunchtime on the Wednesday, I immediately phoned the other two regulators, ASIC and APRA.

This raises a raft of questions. Having known about the allegations of money laundering since 2015, why did CBA not inform the regulators until August 2017? Why did the treasurer warn CBA before CBA talked to the two regulators? When did the Treasurer first hear of the money-laundering breaches? And why did the treasurer not instruct AUSTRAC (an agency of the Attorney General’s department) to inform ASIC and APRA?

In a previous parliamentary hearing, Greg Medcraft, Chairman of ASIC, had said:

I met two days before with the chairman of the Commonwealth Bank, the chair of risk and the chair of the audit committee… There was no mention of what happened. Then I saw the announcement and, about a week later, the chair called me in to apologise. Timeliness and transparency are big issues in this one

So, either ASIC and/or APRA were aware of the allegations of money laundering at CBA and took no action until prompted by the treasurer, or the communications between the various agencies of government are not working as planned. Either way, this is no way to regulate a modern financial system.

Even more regulatory confusion

Just as he is due to leave his role as head of ASIC, Greg Medcraft managed to end two high profile cases with modest wins.

Both ANZ Bank and NAB have settled with ASIC for their parts in manipulating the BBSW intereset rate benchmark. Although the settlement remains to be approved by the Federal Court.

Westpac remains the hold out, and the prosecution’s case has opened in the Federal Court.

But in the euphoria at ASIC, a niggling question remains – what about the Commonwealth Bank?

For some time, Medcraft has warned that action against CBA had not been ruled out and that information was being gathered. Recently Medcraft confirmed that the regulator had “plenty of time” to take action against CBA.

This also raises a number of questions. Not least why ASIC has not filed claims against CBA or announced that there would be no action taken against the bank. If CBA has no case to answer then ASIC should come out and exonerate the bank and relieve its long-suffering shareholders.

But if CBA has even a minor case to answer, and the regulator has held off hoping that the bank would settle without going to court, then ASIC may have been much too clever for their own good.

As a result of a shareholder action following the alleged money-laundering scandal, ASIC is now looking at whether the CBA board “complied with continuous disclosure laws when it decided not to alert investors to the suspicious behaviour”.

This leaves ASIC in an extremely difficult position – looking at a possible failure to disclose the money-laundering scandal at CBA, while at the same time hinting that CBA may have done the same thing with BBSW.

But ASIC is not the only regulator to be operating in the dark. The latest Banking Executive Accountability Regime (BEAR) legislation only adds to the confusion on how best to regulate financial services.

When questioned in recent Senate Estimates about the regulatory impact statements that have been done for new BEAR legislation, Helen Rowell, deputy Chair of APRA, replied that she personally had “not seen them; I couldn’t say whether anyone else within APRA has seen them”.

This is despite the fact that APRA has been given an extra A$40 million over four year to handle the new legislation – for what, and where did this figure come from?

Again, this is no way to regulate a banking system. The confusion around what regulators do and how they do it, must be sorted out.

Where next?

The most obvious answer to clearing up this mess is to initiate a royal commission that looks specifically at banking regulation. In particular, what form a modern banking regulation system should take; which regulators should do what; what the responsibilities of parliament, ministers and regulators should be; and how regulators should share information and tackle common problems (such as banking culture).

Such a royal commission should concentrate on clearing up issues of regulatory philosophy, structure, legal requirements and administration. Whether or not there is an all-purpose banking royal commission, the failures in the current system have to be remedied.

Of course, the government has only got itself to blame for getting in this mess.

The government’s own Murray Inquiry into the Financial System made a recommendation that could have helped. The inquiry recommended the establishment of a new Financial Regulator Assessment Board (FRAB), which would:

advise government annually on how financial regulators have implemented their mandates. Provide clearer guidance to regulators in Statements of Expectation and increase the use of performance indicators for regulator performance.

Sounds sensible? Not to the government, as it chose to accept all of the major recommendations of David Murray’s inquiry except for this one.

And, instead of having one professional body that looks at the performance of regulators, there has been a nonstop procession of “independent” inquiries, by banks themselves, the banking industry and even regulators. No big picture, just a patchwork of unconnected recommendations. And undoubtedly more to come.

The ConversationAn opportunity missed.

Pat McConnell, Visiting Fellow, Macquarie University Applied Finance Centre, Macquarie University

This article was originally published on The Conversation. Read the original article.