Regulators discover Parliamentary accountability

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.

This entry was posted in Economics and economy, Federal Politics, Rule of law, Taking out the trash. Bookmark the permalink.

20 Responses to Regulators discover Parliamentary accountability

  1. Bruce of Newcastle

    Consumer groups are also notoriously prone to being captured by activists. Asking for the hard data is how you flush them out. After that you defund them.

  2. A Lurker

    ASIC: “It’s all about the vibe…”

  3. there is not point telling

    -> there is no point telling

  4. Mother Lode

    incoherent rambler
    #3174054, posted on October 3, 2019 at 12:22 pm

    there is not point telling

    -> there is no point telling

    Yeah! That’s point-telling him!

  5. Tim Neilson

    After that you defund them.

    After that you should defund them*. I bet it doesn’t happen.

    * Or more accurately they should never be funded in the first place. Why do hard working citizens get their money confiscated from them through the tax system to be given to rent-seeking grievance mongers?

  6. JC

    About freaking time too. ASIC is out of control. Fry them.

  7. BoyfromTottenham

    A great start, Senator Paterson.
    “Regulators were stunned by the ferocity of the parliamentary questioning”? Geez, what a bunch of pussies they are, complaining about being asked a couple of hard questions. Hardly ‘ferocious’ in my book. When I worked as a consulting engineer one Project Director regularly asked one of us at the weekly meeting how much Professional Indemnity insurance we had, in case we screwed up something and he had to cover the cost by suing us.
    Turn up the blowtorch, Senator, and keep it there until they get the message. These public servants obviously have no idea how tough things are in the real world.

  8. Terry

    BoyfromTottenham
    #3174212, posted on October 3, 2019 at 3:21 pm

    “Regulators were stunned by the ferocity of the parliamentary questioning”?

    There’s a very simple way to relieve themselves of such a burden and please taxpayers at the same time.

  9. Hugh

    Any chance Paterson can chair the ACCC hearing ?

  10. Nob

    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.

    Very well-put Sinc.

    For politicians, you could substitute “businesspeople” or just “Joe Public”.
    The “ferocity” is nothing compared to the questions and comments I face at a simple client meeting just trying to secure a deal to keep our staff in work , or manage operational situations.

    But I bet the bureaucrat gets paid more, with a lot more leave and pension entitlements.

  11. Frank Walker from National Tiles

    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.

    Incompetent lying little shits have been skirting with criminal law.

    I hope they go down like the vile scum that they are.

  12. Mother Lode

    They really cannot afford to whine about unpleasant questioning considering how they comport themselves.

  13. FelixKruell

    Great work by Paterson.

    I loved the courts slap down of the proposed Westpac and ASIC settlement. And the media’s desperate attempts to paint is as unreasonable, with constant references to wagyu and Shiraz.

  14. Rebel with cause

    Being cynical, let’s forecast how this plays out:

    ASIC gets its funding increased
    All their executives get their bonuses.
    Patterson gets made Junior Assistant Minister for Banking Reform and his mild public criticism of ASIC ends.

    Prove me wrong.

  15. Cynic of Ayr

    Is this on the Public Record? Online perhaps? Available to the unwashed cretins such as I?
    If so, where so?

  16. Wayne From Perth

    It is extremely disturbing that an Agency with considerable power is acting on information gleaned from social media. They sound more like politicians pushing an agenda than professional public servants.

  17. Tezza

    To Cynic of Ayr – use the link at the start of the post.

  18. yarpos

    Good grief, asking for evidence and actual examples is “ferocity” now?

  19. EvilElvis

    I look forward to ‘ferocious’ querying of ATO ‘executives’…

  20. Mr Shipton: but it does provide—and this is the whole certainty point. The point about guidance is basically it’s a road map for lenders so that they know our interpretation of the law and they know where we stand in relation to that. That provides the certainty. We would not for one second usurp the role of the [parlaiment] department.

    This is the issue, while it is helpful to know the regulators view of the law it remains that&#8212their view. The regulators and the ATO in particular firmly believe that they are making the law. And as the exchange below shows the senators see through this and so do the courts. The question is what will be done.

    Mr FALINSKI: I agree. So, teasing this out a bit, your view is that ASIC should be able to determine whether a process that a lender used to make a loan is reasonable or complies with the responsible lending obligations of that lender?
    Mr Shipton: Our role is to provide guidance in relation to that—
    Mr FALINSKI: You want to make that enforceable guidance?
    Mr Shipton: Our guidance, as Commissioner Hughes said before, is not law—

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