Treasurer Josh Frydenberg warns banks of crackdown on reckless behaviour

HE’S determined to crack down on the big banks as further revelations of reckless activities emerge. But our new federal Treasurer hasn’t forgotten there’s other work to be done in Queensland.

BANKS and greedy, high-flying executives face being whacked with a bevy of serious charges by the end of the year, as newly installed federal Treasurer Josh Frydenberg commits to cracking down on the reckless culture that has been fostered by a “slack” corporate watchdog.

The Treasurer is also today sending a strong message to Queensland, acknowledging there needs to be work done on reducing high unemployment.

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But in underscoring one of his priorities, Mr Frydenberg has slammed banks and the Australian Securities and Investment Commission, which has been accused of being asleep at the wheel while mums and dads and business have been ripped off.

It comes as ASIC announced yesterday it had laid criminal cartel charges against ANZ over its 2015 sale of $2.5 billion shares to investors. ANZ said it would defend the charges.

But it is understood further charges are likely across the sector as the Government-appointed special prosecutor in ASIC – which now has a new chairman – moves to take action.

In a one-on-one interview with The Courier-Mail, Mr Frydenberg hinted of a further blowtorch on the industry in the wake of the banking royal commission handing down its interim report later this month.

“We’ve seen examples of appalling behaviour. We’ve seen fees being charged to dead people, fees for no services, allegation of lying to regulators and ... over 300,000 alleged breaches by one company making unsolicited insurance offerings,’’ Mr Frydenberg said.

“It is my view that the regulators should have done more, that they should have been more aggressive and they clearly have been aware of a lot of those examples of misconduct.

“And the regulators and ASIC in particularly has a case to answer how these occurred on their watch.”

Federal Treasurer Josh Frydenberg gets a coffee from shop owner Winnie Xu in Camberwell, Victoria. Picture: Nicole Cleary

Mr Frydenberg said the Government had already provided extra resources and increased penalties to ASIC but denied the job was done.

He said banking royal commissioner Kenneth Hayne was doing an “excellent job and we await the interim report of the commission by the end of the month”.

“I don’t want to pre-empt their findings (but) obviously there are very damning and appalling allegations of misconduct.

“What is critical is well-resourced and effective regulators. And we also need the companies themselves to put a focus on a better culture.

“Australians affected by financial misconduct deserve timely remediation. A new ASIC remediation power as recommended by the ASIC Capability Review and accepted in principle by the Government is one potential solution to ensure better and speedier consumer outcomes. As part of the Government response to the Banking Royal Commission this will be one new power we will consider implementing.”

He hinted at more long-term infrastructure for Queensland and support for mining investment.

“What’s interesting about Queensland is that the unemployment rate is higher than the national average and this is probably a function of the transition from the mining investment boom to the production phase.”

He said the Government was focused on helping Queensland and had already announced $5 billion in infrastructure projects for the state.

The big four banks are on notice amid the banking royal commission.

“There’s obviously talk around water, particularly dams.

“There’s a lot happening in Queensland but the challenge is to continue the strong job growth we’ve seen nationally in Queensland as you deal with the higher rate of unemployment compared to the national average.

“I think there’s a transition going on there and Queensland and Western Australia are the states where the unemployment levels haven’t come down as fast as other states have and I think that can be directly pointed back to mining.

“Obviously we support increased investment in the Galilee Basin.”

He said despite enviable growth, there were some “Australians who are doing it tough”.

Mr Frydenberg would not guarantee he would hand down a Budget in May given speculation of the timing of a Federal election.

He hosed down the potential for the Government to go on a spending spree to win voter support.

“We need to maintain financial discipline and paying back Labor’s debt to ensure we stay on that trajectory to retain balance in 2019/2020 and a surplus after that.

“For every dollar you spend, if you’re not matching that with revenue, you have to borrow it and when you borrow more you have to pay interest and interest is an opportunity to fund a hospital or a school.”