Thursday, 03 May 2018

Radio 6PR Gareth Parker Mornings



Subjects: Pressures of Federal Parliament; CBA data loss; Banking Royal Commission; business tax cuts; Perth byelection

GARETH PARKER: Christian Porter, the Attorney-General joins me in the studio. Christian, good morning.

CHRISTIAN PORTER: Morning to you, Gareth.

GARETH PARKER: Lots to talk about. Let's start with the member for Perth, for the next week or two at least, Tim Hammond, a man who sort of bared his soul on the radio station yesterday. It started a national discussion about the extent to which politics is compatible with family life. You are a pollie who is in a very similar situation, in terms of your family structure. What did you make of what Tim had to say yesterday?

CHRISTIAN PORTER: Oh look, well, the first thing I haven't had a chance to talk with Tim, so I hope he won't mind us talking like this on the radio. He knows that politics is full of these conversations, but he's just a fabulous bloke. He was just a great guy, is a great guy, and he made a decision based on all of the circumstances that were relevant to him and the facts that he had to hand.

But to your first question, I think the thing is that families might look similar and people might be in similar stages of a cycle with ages of kids and numbers of kids and whether partners are working or not working, but every family is completely different; as different as snowflakes are. So you have to sort of, I think, not make assumptions about what individual pressures is quite an unusual lifestyle of politics is bringing to bear on different families, because they will all be completely different. And when someone like Tim Hammond, who, as I say, is just a great, genuine, upfront bloke, says this was really not working for his family, then I absolutely believe and I totally get it, and that's just that.

GARETH PARKER: Because not everyone does….there’s been some reaction saying he knew what he signed up for and he owes it to taxpayers to see through his term.

CHRISTIAN PORTER: Well, no one really knows what they're signing up for. Like, a lot of people will go into any job and all of us as human beings have had this experience; you think you know what a job will be like and then you get into it and it is often quite different. Sometimes it's easier, sometimes it's more difficult. Sometimes things that you think will cause pressures in your family life don't and sometimes things that you never thought of will. So I think that's being, with respect to all the people who've said that, a little bit harsh, insofar as no one has perfect foresight about what a job like this is going to do and how it's going to affect an individual family. And if Tim has just found that the effects on his family were so stressful and so difficult that he had to resign, then good on him for making that call.

GARETH PARKER: He was quick to add that, whilst he found it impossible to continue, he didn't say that that meant that it was the same for everyone; that there were plenty of MPs both sides of the aisle, all around the country who do make it work. Do you believe that the structure of the Parliament, the structure of modern Australian federal politics, is conducive to a happy family life?

CHRISTIAN PORTER: Well, it makes it difficult; there's no doubt about that, like it's a stressful job to start off with. The travel is difficult. I mean, in Cabinet, so Parliament will sit half the year and Cabinet sits every week of the year. So a Cabinet minister from WA or from Darwin, for that matter, is travelling essentially single week two and a half thousand kilometres and that's physically draining and it places pressures on your family. Some families outside politics in fly-in fly-out jobs experience similar types of pressures. So it is what it is and it's not easy. Modern media cycles also make it a difficult job, but you know back in the days of John Curtin, he was because of the fact that quick transport wasn't as readily available, he would effectively have to go to Canberra for seven months and stay there. So, in those days, they were enjoying …

GARETH PARKER: ….and if you read biographies of John Curtin, he hated it.

CHRISTIAN PORTER: Yeah, of course. Like, they were enduring …

GARETH PARKER: …it contributed to his poor health.

CHRISTIAN PORTER: Completely. They were enduring really long periods away from their families without transport technology and media technology. So like, you can't Facetime your kids at night. So look, it's not easy, but I would just make the point that all families are different and none of us should presume to know the ways that outside stresses affect the internal operations of families, which are delicate and complicated things and have to be looked after, and what Tim has done here is looked after his family.

GARETH PARKER: Onto the Commonwealth Bank.


GARETH PARKER: Every day, there's a new scandal.

CHRISTIAN PORTER: So, yes and the most recent one I was informed of on Tuesday night, which, if I can give the best summary I can with the limited information that I've got available; back in 2016, the Commonwealth Bank had a range of magnetic data storage tapes which had large amounts of data on them and they were subcontracted to Fuji Xerox for destruction. And it appears that at least one of those tapes was marked for destruction, was assumed to have been destroyed, but there was no final evidence to its destruction. So they at that time in 2016, the Commonwealth Bank notified the Information Commissioner of that, if I can describe it broadly as a loss of data, because they couldn't finally confirm that it had been destroyed. Now, that is a matter of some significant seriousness, so I've requested a brief from the Information Commissioner about how that was handled in 2016.

GARETH PARKER: So that confirms that there was a government agency, the Information Commissioner, who was notified back in 2016 about this loss of data.

CHRISTIAN PORTER: Oh, that's correct, but I might say the rules in 2016 were very different from the rules that we have now. So, earlier this year, the Turnbull Coalition actually changed the law so that in circumstances where there is a loss or unauthorised disclosure of personal information for companies over $3 million, or smaller businesses of a certain type like health providers, then there is a mandatory notification requirement to notify your customers. So we've actually changed the law, and it's now very different from it was in 2016.

GARETH PARKER: So if this incident happened now, what penalties would the Commonwealth Bank face?

CHRISTIAN PORTER: Well, potentially, so I can't say that this is definitely the case, because I'm not apprised of all of the individual and discrete facts of this matter, but if someone were required to notify a data breach, in these circumstances, individuals can be fined up to $420,000, and corporations can be fined up to $2.1 million.

And the system that now exists is if there is an unauthorised access or disclosure of personal information, or a loss of personal information, and you're a company over $3 million or a certain type of smaller business, then you are required, compelled to notify the Information Commissioner, and the Information Commissioner will make a determination as to whether or not that resulted in serious harm to your customers, and then they have the power to compel you to notify your customers. But the breach itself, you can be fined for having allowed to happen.

GARETH PARKER: So, should the Commonwealth Bank, as a matter of good corporate citizenship, informed its customers of this potential loss at the time, despite its obligations under Australian law as it was at the time?

CHRISTIAN PORTER: Well, you could certainly reach that conclusion. I mean, they might have taken a different view to the matter as they clearly did. I mean, that's really…

GARETH PARKER: …So, you think they should of?

CHRISTIAN PORTER: Well, that's really a question, I don't have enough information before me at the moment to make that final call. But you would have thought that there is a good rule of corporate governance that you shouldn't keep your clients in the dark.

GARETH PARKER: No, you shouldn't and yet they did, and this is just the latest stack on the mill. Sharp practices in financial planning; poor practices in oversight about complying with financing terrorism laws; any place that you care to pick up a rock and look under it across our major financial institutions and very ugly things are crawling out.

CHRISTIAN PORTER: I'd have absolutely no reason to disagree with that appraisal. I have been astonished by many of the things that have come out in the Royal Commission. I mean it occurred to me, having watched this industry for some time, that the major problem, and it was a very major problem, was lending practices; the fact that in many circumstances customers were being loaned money which in any realistic assessment they would not have been able to repay.

Now, in some circumstances that was an issue to do with the customers, in many circumstances it was an issue to do with the banks and the banks' practices. But what, in my observation, the Royal Commission has now uncovered is that that type of sharp practice that was clearly visible in the area of loans was indentured in a whole range of other business models inside the banks. So, I have been astonished at what has come out and I think that the behaviour has been despicable.

GARETH PARKER: So, they're rotten from top to bottom?

CHRISTIAN PORTER: Well, what I would say is that sharp practices that we knew about in the loan component of the banking business seem to also have existed in financial advice and a whole range of other major components of their business.

GARETH PARKER: Listeners to the program and the public more generally keep saying they want people, right, individual people, they don't want to hear about systems, they want individual people to face consequences; they want people to go to jail.

CHRISTIAN PORTER: Well I mean, individual people are already starting to face consequences and we are in the very early days of the Royal Commission. And as has been noted there are very serious penalties. So, no one, least the Attorney General's going to get out in front of the Royal Commission and say this or that person has clearly breached this or that law, and this or that penalty applies. But that process is going to happen, clearly.

GARETH PARKER: So, you think there'll be prosecution briefs land on prosecutors' desks at the end of all this?

CHRISTIAN PORTER: Well, I would be very surprised if there wasn't.

GARETH PARKER: Okay. Do you think that your Government's going to cop a political hit for opposing this Royal Commission for so long?  

CHRISTIAN PORTER: No, I don't think so. I think that we called it- I mean, in hindsight if we'd known now what we now know, we probably would have called it earlier. Certainly that is a fair observation. But ultimately we called the Royal Commission, its terms of reference were very good and broad and will encounter and uncover a whole range of things that in actual fact had it been called earlier with narrower terms of reference, we've never have got to know about. So, that is a bit of a silver lining in terms of the late calling of the Royal Commission.

But ultimately, as you say, people want the truth of the practices to come out and they want appropriate consequences in strict accordance with the law to fall on people and corporations who have done the wrong thing. And ultimately that's what people want to see and that, I think, will be the likely result of the Royal Commission.

GARETH PARKER: Pretty difficult to prosecute an argument for business tax cuts in this environment.

CHRISTIAN PORTER: Well, that may or may not be true but the reality is that we have delivered…

GARETH PARKER: …I think it's true.

CHRISTIAN PORTER: Well, that doesn't mean that you don't do it, though. Like, if something's difficult in politics or temporarily unpopular because of an issue of the day, even a very important issue of the day like the Banking Royal Commission, the reality is that we created in excess of 400,000 jobs last year - a record. Why were we able to do that? It didn't happen by luck or by accident it happened because of policies that we'd put in place and a key component of that policy is to reduce the taxes for businesses to help them grow, help them reinvest and help them employ.

Now, we've done that for businesses with a turnover of less than 50 million. And the idea that that's helped our economy go gangbusters but we should just stop there because there's a Royal Commission going on is not one that I accept. If you want a competitive Australia where we give more jobs to our kids and to our families, then you have to make sure that our businesses are competitive.

GARETH PARKER: Liberal Party going to recruit a star candidate to run in Perth and pinch that seat from the Labor Party?

CHRISTIAN PORTER:  I certainly hope so. I would have thought on the back of the announcements, the $5.4 billion dollars worth of investment that we announced with $3.2 billion from the Commonwealth, that we have got a very strong case that the Coalition Turnbull Government is looking after West Australians and Western Australia and we can run a great campaign in Perth. So, I don't know who will be a candidate, but I'm sure that we will recruit very strongly.

GARETH PARKER: Thanks for your time, Christian.

CHRISTIAN PORTER: Pleasure, Gareth.