One of the fig-leaves that so-called “independent” government agencies rely to justify their lack of democratic accountability is that they are required to appear before the Parliament and answer questions. Usually this is just a nonsense. Politicians are time-poor generalists and are up against time-rich specialists. The bureaucrats are usually able to obfuscate and bullshit their way out of most situations.
But not always.
Here is the great Senator James Paterson asking ASIC some tough questions:
CHAIR: I don’t wish to make any observations about the legal merits of your appeal—that’s not appropriate—but I am concerned about, effectively, the public policy implications of your decision to appeal. What is your advice to lenders in the meantime before this is resolved?
CHAIR: Let’s get to the heart of that. I know there will be a number of questions on this. You talked about the harm and financial hardship. I understand ASIC does not approve of the processes that Westpac was using to assess people’s ability to pay back a loan, but what is the evidence base, given that default rates are so low, that there is harm being caused and there is financial hardship? Where are the examples of people who have been given inappropriate loans and suffer as a result?
CHAIR: You talk about consumer harm and the evidence you’ve had from consumer groups about that. What’s the data that supports that? Is it anecdotal?
Mr Hughes: We can certainly provide the committee with the transcript of that evidence. What we are saying in terms of your specific—
CHAIR: I’m not really interested in the transcript, Mr Hughes; I’m interested in the evidence. Is it just the view of a consumer activist group that this is the case? Do they have hard evidence to demonstrate that it’s the case, or is it anecdotal? How many people are we talking about? I mean, if default rates are as low as they are—that’s the only reliable meter I’ve got. If you have others, I would be interested.
CHAIR: … but you haven’t addressed my question. You said there were people who were going without food on the table because of the loans that they had been given. What’s the evidence for that?
Mr Hughes: I don’t have that evidence in front of me. That was evidence that was given to us in the public hearing. We would need to extract that from those—
CHAIR: And you mentioned it was by some kind of consumer group. To what extent did they support that statement with evidence?
CHAIR: In short, does that mean the answer is: no, there is no evidence of harm; it’s about potential future harm that may occur?
That’s got to hurt. Government Senator saying that government regulator is just making up stuff. Turns out ASIC realise they are on thin ice:
Regulators were stunned by the ferocity of the parliamentary questioning, and concerned that the attack could foreshadow additional moves to loosen the bonds of the scandal-prone finance sector.
But within ASIC some comfort has been drawn from the fact the onslaught happened in public, rather than behind closed doors or through discreet telephone calls.
Good – there is not point telling off regulators behind closed doors.