Malcolm Turnbull has already employed ‘guilt by association’ of Labor politicians in his attempt to pass the ABCC legislation.
The arguments he uses to implement the ABCC legislation could just as easily apply to the banking, insurance and other financial services in the industry.
Scott Morrison and Kelly O’Dwyer endorsed the Government response to the Murray report which noted:
‘The financial system affects all Australians.
The financial sector is the largest in our economy, having contributed $139 billion over the past year and employing around 400,000 Australians.
The financial system has a vital role in commercial activity across the Australian economy, contributing to productivity and growth. The biggest decisions Australians make in life — buying a home, providing for their retirement, or starting a business — are all supported by our financial system…

To strengthen the accountability of our regulators, we will review the Statement of Expectations for APRA, ASIC and the Payments System Board and increase requirements for the regulators’ annual reports. A greater focus on performance assessment in these documents will ensure regulators are focusing on their capabilities and performance against their mandate.
The Government is already conducting a capability review of ASIC. We will consider any recommendations the review makes to further enhance the capability of ASIC. We will consider the Inquiry’s recommendations on adopting a three year funding model for ASIC and APRA and the operational flexibility and staffing arrangements of ASIC and the other financial regulators in light of any findings by the capability review. We will also review ASIC’s enforcement regime to ensure it provides a credible deterrent for poor behaviour and breaches of financial services laws. We have also commenced consultation on a model whereby ASIC’s regulatory activities would be funded by industry.

We will strengthen the focus on competition in the financial system by explicitly including consideration of competition in ASIC’s mandate and tasking the Productivity Commission to examine the state of competition in the financial sector in 2017.

Improving Australia’s financial system
Government response to the Financial System Inquiry
The Hon Scott Morrison MP The Hon Kelly O’Dwyer MP

Is the Finance Industry less important to the Australian economy than the Construction Industry? Have the pious statements resulted in implementation of the measures now?

Questionable management practices within banks has been a reality in Australia since the 1890s. And governments have protected them from their management follies.
Reference: ‘The Land Boomers’ author Michael Cannon. ISBN: 9780522846638
‘The State Library of Victoria was where The Land Boomers began. At the time of Cannon’s research it was the quiet and distinctly dusty basements of the then Archives Section of the State Library of Victoria that held his treasure trove. These were the old Supreme Court insolvency files, especially the records of the so-called secret compositions of the 1890s – legal instruments that allowed failed, and often unscrupulous, investors to pay just a tiny fraction of their debts to avoid bankruptcy and public humiliation. These were public records but they had never been made public.
Cannon, way ahead of his academic counterparts, had the perspicacity to see that these original records – barely 70 years old when he started writing – had the power to illuminate not only late-Victorian Melbourne but also his contemporary society. Descendants of the entrepreneur boomers, and the institutions that they supported (including some of the newspapers for whom Cannon had worked) still wielded real power in the Melbourne of the 1960s.
Unease at his revelations brought threats of censorship, suppression and libel actions.’
An historical Cannon – Andrew Lemon
http://www.slv.vic.gov.au/sites/default/files/La-Trobe-Journal-97-Andrew-Lemon.pdf
The two most significant banking failures in the 1990s were the failures of the State Bank of Victoria (SBV) and the State Bank of South Australia (SBSA). The banks were owned by the respective State governments and experienced pre-tax losses exceeding three times the 1989 level of shareholders’ funds. …
At the start of the 1980s, Western Australian (WA) Teachers’ Credit Society was one of the largest credit unions in Australia and grew rapidly in the first half of the 1980s partly based on commercial lending. In 1987 after several years of difficulty, State government assistance was sought and the Government-owned R&I bank acquired the credit union. That takeover ensured that member’s deposits were protected, ultimately by the WA taxpayer. Several other credit unions in WA also experienced problems and experienced runs by depositors.
http://fsgstudy.treasury.gov.au/content/_download/Davis_Report/pdf/24_Appendix4-2.pdf
Westpac and the Foreign Currency Loans (FCL) scandal:
In February/March 1991, the ‘Westpac Letters’ were exposed to the public. Dated November and December 1987, the letters are from Allen Allen & Hemsley to a Westpac senior executive regarding the involvement of a Westpac subsidiary, Partnership Pacific Ltd, in the management of some FCLs. The letters highlight PPL’s incompetence, inaction and denial, and customer rip-off on the side. The intent of the letters was to advise Westpac on minimising its liability for the catastrophe of its own doing. Democrat Senator Paul McLean sought the advice of Melbourne law firm Galbally & O’Bryan. It advised, in February 1991:
We confirm our advice that we consider that the letter from Allen Allen & Hemsley to the Westpac Banking Corporation dated the 26th November, 1987does not attract solicitor/client privilege. … As stated [in Halsbury’s Laws of England] “there can be no professional confidence as to the disclosure of communications of this nature and the furtherance of a fraud or assistance given for the purpose of wrongfully evading the law …”.
The letter … is an acknowledgement that illegal activities took place in relation to the PPL managed foreign currency loans [i.e. skimming off the top through ‘point taking’ and ‘deal switching’].
If the advice rested at that then in our view, legal professional privilege would apply. However, the advice went further by recommending a strategy to avoid admission of the dishonest activities and a method to contain repayment to those persons who suffered loss as a result of those activities.
Westpac went on the offensive, claiming confidentiality (gaining assent in the NSW Supreme Court) and harassing whistleblowers. As a Westpac victim (Trevor King / Eltran) later claimed before the Elliott Committee Inquiry hearings (the follow-up inquiry to the 1991 Martin Inquiry) following comprehensive official inaction on the Westpac Letters, 11 May 1992:
It is beyond belief that you people are not investigating this. Think about it. Have our public watchdogs become bank lap dogs? Where is the Securities Commission, the Trade Practices Commission, the Attorney-General, the Treasurers, past and present, who are directly responsible for what we are talking about? The Westpac letters and folders are so clear that Blind Freddy could realise the white collar crime involved.
http://www.bankvictims.com.au/westpac-bank/item/11086-westpac-the-foreign-currency-loans-scandal-and-the-de-jersey-factor
The National Companies and Securities Commission and its replacement, the Australian Securities Investments Commission have never been granted adequate funds or resources to pursue a proactive surveillance of regulatory compliance.
Former bankers in the Turnbull Ministry, Malcolm Turnbull, Arthur Sinodinos, Josh Frydenberg, Kelly O’Dwyer, Angus Taylor, and Steven Ciobo.
Record of former employers:
Turnbull – Macquarrie Bank – company embroiled in financial advice scandal -The reputational damage was great as Macquarie now faced three problems. First, there were the charges by ASIC that Macquarie failed to address recurring compliance deficiencies involving a significant number of its advisers providing financial advice to retail clients. Second, that they failed to report these failures to ASIC, as the law required. The third and most serious allegation was that Macquarie used one of Australia’e biggest accounting firms, Ernst & Young, to gloss over the serious compliance problems.
Sinodinos – Goldman Sachs – company provided political support in the USA – could also apply in Australia. In the first half of 2012, Ted and Heidi Cruz obtained the low-interest loan from Goldman Sachs, as well as another one from Citibank. The loans totaled as much as $750,000 and eventually increased to a maximum of $1 million before being paid down later that year. There is no explanation of their purpose.
Taylor – Rabobank – company fined $1 billion of LIBOR interest rigging scandal
O’Dwyer – NAB – company embroiled in financial advice scandal.
Frydenberg – Deutsche Bank – company fined $2.5 billion for LIBOR interest rigging scandal. In another case, a former Deutsche Bank Securities analyst will pay a $100,000.00 penalty and be suspended from the financial industry for a year because he issued a key stock rating that clashed with his personal forecasts.
Ciobo – Senior Associate, Australasian Institute of Banking and Finance. Also served as an Alternate Governor to the World Bank, Asian Development Bank and European Bank for Reconstruction and Development.

So calls for a Royal Commission of inquiry into banks and the finance industry amount to no more than a political dog-whistle to placate the current anger of voters. But it won’t happen.
Just for interest, since 1970 there have been six Royal Commissions dealing with governance and corruption in unions, but only one into the banking and finance industry, an inquiry into the failure of the HIH Insurance Group in 2003 by Professor Kevin Davis.
Australian Governments have never, and will not, initiate a Royal Commission into the operation of banks and other entities in the finance industry. Why is it so? Is it because all political parties depend on loans from banks and other financial institutions to finance election campaigns? So it is prudent to treat them with due respect and leniency.
In the public interest all political parties need to be required to record all loans they have with banks and other financial institutions on a register accessible by the public. Donations to political parties need to be recorded, so why not loans? We may then understand the influence the finance industry wields over all Australian governments.
The Liberals replaced a three word slogan Prime Minister with a one word slogan, “Innovation”, Prime Minister. The approach is misguided and misdirected as humans who have lived in Australia for around 40,000 years have been innovative. For instance, the boomerang, didgeridoo, Victa lawnmower, Hills hoist, WiFi technology, Cochlear bionic ear, Continuous Positive Air Pressure (CPAP) machine and the ring pull lid on tin cans.
According to Budget Paper no. 1 (2013–14) spending on Medicare for the current financial year is estimated to be $19.0 billion.
Government Assistance to Trade and Industry was valued at $17 billion in 2013-14. http://www.pc.gov.au/research/ongoing/trade-assistance/2013-14
I find it ironic that the Productivity Commission takes about 12 months to produce the report, usually in June. I predict this year it will be delayed until after a Double Dissolution election is held
In the Overview the following comments were made:
“Notably in the year to May 2015, the Government announced additional industry assistance involving about $1.5 billion as well as reductions of around $1 billion. Significant increases were afforded through the Industry Innovation and Competitiveness Agenda.
Where Government becomes a ‘co-investor’ through firm-specific grants, and despite some recent government resistance to such calls, resource misallocation is likely. Moreover, governance and due diligence fall short of contemporary, comparable best practice. The term ‘co-investor’ is a commercial misnomer.
Better government assessment processes are needed…
Preferential trade agreements add to the complexity and cost of international trade through substantially different sets of rules of origin, varying coverage of services and potentially costly intellectual property protections and investor-state dispute settlement provisions.
The emerging and growing potential for trade preferences to impose net costs on the community presents a compelling case for the final text of an agreement to be rigorously analysed before signing. Analysis undertaken for the Japan-Australia agreement reveals a wide and concerning gap compared to the Commission’s view of rigorous assessment.”
The amount of money for assistance to trade and industry will increase dramatically to fund “innovation”.
The reason could be that Australian banks are unwilling to fund “innovation” and a Liberal Government will throw money at start-up companies that traditionally have a low success rate.
The Budget due on May 3, 2016 is likely to make many reductions to Social Welfare payments, including Medicare, but will make innovative additional payments for ‘the welfare that dare not speak its name’, Government Assistance to Trade and Industry.
Government Spending
Quotes from Scott Morrisson:
‘and it’s not something that I’m going to allow to guide our decision making ’cause as Treasurer, I have to focus on the things that I can control and what I can have an influence over is how much the Government spends of taxpayers’ money.
7:30 Report Australian Broadcasting Corporation
Broadcast: 23/09/2015
Reporter: Leigh Sales
And it is our duty to taxpayers to soberly manage our public finances. Our taxpayer resources must be put to best use, our deficit must continue to be steadily reduced and the debt burden on future generations must continue to be brought under control.
Appointment as Treasurer 21 September 2015
So if you allow expenditure to run and go it will, it definitely will. As a government that is something that you can very much seek to control. You don’t use revenue to chase higher expenditures, that is a very vicious cycle.
Interview with Michael Brissenden, AM, ABC Radio 1 October 2015
Mr Morrison revealed on Wednesday that government spending had blown out to levels not seen since the recession of the early 1990s and he was more interested in cutting that than raising more revenue on a net basis.
“We have a spending problem, not a revenue problem,” he said.
But a review of Government Assistance to Trade and Industry does not appear ‘to be on the table’.
Arthur Sinodinos, a former employee of Goldman Sachs and the National Bank tries to justify lower company taxes by referring to the discredited ‘trickle down effect’ of economics.
‘The IMF Confirms That ‘Trickle-Down’ Economics Is, Indeed, a Joke.
The IMF report, authored by five economists, presents a scathing rejection of the trickle-down approach, arguing that the monetary philosophy has been used as a justification for growing income inequality over the past several decades. “Income distribution matters for growth,” they write. “Specifically, if the income share of the top 20 percent increases, then GDP growth actually declined over the medium term, suggesting that the benefits do not trickle down.”‘
http://www.psmag.com/business-economics/trickle-down-economics-is-indeed-a-joke
Also the BBC documentary ‘The Super Rich and Us’ Jacques Peretti looks at how the super-rich first exploited an obscure legal loophole to make Britain one of the most attractive tax havens on earth. He argues this was no accident. Wooing the super-rich was a deliberate strategy by government to reconfigure the British economy, under the belief their wealth would trickle down to the rest of us. But it didn’t. The OECD now say the British economy would have been 20 per cent bigger had we not pursued the super-rich. So who sold us the fallacy and why?

There are 16 ministers with a Law degree in the Turnbull Ministry. Law training concentrates on precedent and decisions in the past. Innovation concentrates on new and inventive thinking, so will the lawyers recognise innovative ideas?
There is nothing intrinsically innovative about an ‘app’. Definition: App is an abbreviated form of the word “application.” An application is a software program that’s designed to perform a specific function directly for the user or, in some cases, for another application program.
also
‘a self-contained program or piece of software designed to fulfil a particular purpose; an application, especially as downloaded by a user to a mobile device’.
In the rush to release an app sometimes essential security provisions and extensive testing of the program are not comprehensively carried out. This can lead to unintended consequences and financial penalties of one type or another. The Uber application sends Australian credit card details to the Netherlands to be processed.
In 1842 Lady Ada Lovelace wrote what is considered to be the world’s first computer program. So apps aren’t necessarily innovative. She was working with Charles Babbage and was the daughter of the poet George Lord Byron.
The myth that needs to be shattered is that Malcolm Turnbull makes good decisions. His technology solutions are not fully thought through. An example is when he proposed a ban on tungsten filament light bulbs in 2007, but did not take into account the problems of the disposal of the Compact Fluorescent Lights that replaced them. They contain toxic mercury that can cause nerve damage. The intention was to send them to landfill. Groundwater contamination was a possible consequence.
MEDIA RELEASE
The Hon Malcolm Turnbull MP
Australian Minister for the Environment and Water Resources
Page 1 of 2
T11/07 20 February 2007
World first!
Australia slashes greenhouse gases from inefficient lighting …
The step, announced today by Minister for the Environment and Water Resources, Malcolm Turnbull MP, should reduce Australia’s greenhouse gas emissions by 4 million tonnes by 2012. …
However, by 2015 the annual cut in emissions will have soared to an estimated 4 million tonnes per
annum…
“These more efficient lights, such as the compact fluorescent light bulb, use around 20 per cent of
the electricity to produce the same amount of light.”…
“A compact fluorescent light bulb can last between 4 and 10 times longer than the average incandescent light bulb, which can lead to major savings in household energy costs.”
“While they may be more expensive to buy up front, they can pay for themselves in lower power bills within a year.”
****
These energy efficient globes contain mercury, a dangerous toxin that affects the nervous system.
The way things worked in 2007 is as the new globes wear out and are discarded, they’ll end up in their millions in the garbage tip, contaminating landfill.
Green groups called on the Government to introduce a national recycling scheme by the end of year. but they feared that the Government was not listening.
“As best as we can make out from the myriad stories doing the rounds, the environmental group Planet Ark were about to announce a new campaign next week, in partnership with Philips. It was to be called Ban the Bulb. But the new federal Environment minister, Malcolm Turnbull, stole their thunder (and, it seems, their idea) by announcing today that incandescent light bulbs were to get the flick (as the newspapers are headlining the move)”. 20 Feb 2007
Another monumental Turnbull technology failure is the fibre to the node NBN. There is a limit to the amount of data that can be sent along a copper telephone line. Fibre optic cables can transmit many more channels of data. Research carried out in the 1940s by Claude Elwood Shannon indicated there is a limit to the amount of data that can be transmitted. This limit is lower for copper cables, particularly the old cables in the existing Telstra network.
The Shannon-Hartley theorem tells the maximum amount of error-free digital data that can be transmitted over a communications channel (e.g., a copper wire or an optical fiber) with a specified bandwidth in the presence of noise.
Bandwidth is the range of frequencies that a communications channel can carry. The greater the bandwidth of a channel, the larger is its throughput (i.e., data transmission capacity).
The term noise refers to signals in a communication channel that are unrelated to the information that is being transmitted and can reduce the throughput of the channel. Noise can be electrical signals that occur in copper wire as a result of radio frequency interference (RFI) from electrical and electronic products. In the case of optical fiber, it can be distortions of the light waves traversing the fiber as a result of minor imperfections in the fiber.
http://www.abc.net.au/news/2016-03-01/manning-what-went-wrong-with-the-nbn/7210408
In 2013, then opposition communications spokesman Malcolm Turnbull pledged to ditch Labor’s fibre-to-the-premises national broadband network and replace it with a mix of technologies including upgraded copper wires and pay TV cables.
Now, despite a blowout in the cost of his version of the NBN from $29.5 billion to $56 billion, he insists it is better than what Labor would have delivered.
‘A mixed technology model is cheaper and faster and more efficient. That is beyond question,’ Turnbull, now prime minister, told parliament last week.
But, according to communications consultant Paul Budde, it’s not. He says many in the telecommunications industry are losing confidence in the NBN.
‘If you look at the shambles which we have now, obviously he doesn’t know what he is doing,’ Budde says. …
In an exclusive interview with Background Briefing, former NBN chief Mike Quigley says the blowout in the government’s ‘multi-technology mix’ (MTM) version of the NBN has been almost wholly caused by the cost of upgrading existing networks.
‘I think it was simply an ongoing underestimate, and a quite tragic underestimate, of the costs of introducing these technologies. That’s fibre to the node, that’s cabinets out in the street, and upgrading a Hybrid Fibre Co-axial (HFC) network … using those old cables, the copper cables and the Pay-TV cables,’ he says.
‘On NBN Co’s own numbers, together with a strategic review, you can absolutely prove that the $15 billion has nothing to do with the fibre to the premises or the fixed wireless or the satellite, the original technologies. It’s nothing to do with that.
‘In fact, those costs came down between the strategic review and the latest corporate plan, which means the actual costs of the other parts, the newer MTM parts, have gone up more than $15 billion.’
http://www.abc.net.au/radionational/programs/backgroundbriefing/turnbulls-faster-cheaper-nbn/6895762
Yesterday’s leaked internal document revealing that the NBN’s rollout of fibre-to-the-node has been well behind schedule is further confirmation that Malcolm Turnbull’s version of the NBN is proving to be much more expensive to deliver than was originally hoped.
Remember that the only merit of Turnbull’s “multi-technology mix” (MTM) was that it would be cheaper to build, and arrive sooner. There was no question that it was technically inferior to the former Labor government’s mostly fibre-to-the-premises network, which then shadow communications minister Turnbull derided as a “Rolls-Royce” option.
But if the Coalition’s NBN could be delivered cheaper and sooner, there was a good argument that the earlier arrival of revenue from business and residential customers could fund subsequent upgrades to the network.
It hasn’t worked out that way.
The MTM network has blown out twice in projected cost – first, from $29.5 billion to $41 billion, and then last year to “up to” $56 billion. And instead of delivering 25 Mbps by 2016, now the MTM network isn’t expected to be finished until 2020 – only a year earlier than Labor expected to finish its rollout. NBN’s own chairman has admitted meeting this 2020 target will require a “heroic” effort. …
The latest leak confirms the copper-based fibre-to-the-node component of the MTM – which will bring fibre through to fridge-sized cabinets on many street corners – is proving difficult. One of the well-known disadvantages of fibre-to-the-node is that the nodes require power. That there have been delays due to negotiations with electricity suppliers was predictable and can only be considered a failure of network planning.

Reference: By Paddy Manning
Updated 2 Mar 2016,
http://www.abc.net.au/news/2016-03-01/manning-what-went-wrong-with-the-nbn/7210408
Unfortunately many lawyers suffer from intellectual arrogance and believe they can be expert in any field. Technology requires an intellectual rigour to master the often abstract concepts of physics and information theory that may be beyond a lawyer’s capability.
I hope this communication shows you another aspect of Malcolm Turnbull’s decisions.

John Stickle
Member Institution of Engineers Australia (Retired)
Member Australian Computer Society (Senior)
Graduate Diploma Applied Finance and Investment Securities Institute of Australia
5 Robinson Terrace
Daglish WA 6008

Mobile 0411 186 408