FAR bill hits snag over civil penalties measures

Senate passage of the Financial Accountability Regime (FAR) stalled last week after the Albanese Government decided not to press ahead with an amendment to include civil penalties of up to $1.1 million for individual executive breaches.

The penalty measure was included to secure Greens’ support to pass the bill and other financial services legislation but the decision sparked an uproar from banking and superannuation executives over the lack of consultation on the amendment.

FAR represents the tranche of remaining measures recommended by the Hayne royal commission to strengthen consumer protections and deter future financial sector misconduct.

It is an extension of the Banking Executive Accountability Regime, applying to all Australian Prudential Regulation Authority-regulated entities.

Greens Senator Nick McKim, who previously described the FAR bill as “all carrot, no stick”, has hit out at Financial Services Minister Stephen Jones for walking away from the agreement the two parties have reached to secure passage of FAR.

“Labor has cracked under pressure from the bank executives. Reneging on the agreement shows very clearly that Labor values the interests of bankers over the interests of customers,” Senator McKim said on Friday.

“There is absolutely no doubt that Minister Jones and I had an agreement, and any claim that there was no agreement is false.”

He says the Greens have since made a revised offer to Mr Jones “on the basis that the Government would support a revised amendment which would ensure that small and mutual banks and, importantly, executives of small and mutual banks are not unreasonably impacted”.

“For clarity, this means that executives of small and mutual banks would not be subject to civil penalties for breaches of their accountability obligations,” he said.

“In other words, we would be going squarely after the top end of town, where this kind of reform is so desperately needed to send a clear message to the executives of the big banks in this country that their poor behaviour and their appalling culture, uncovered by a once-in-a-generation royal commission, will not be tolerated any longer.”

FAR has already progressed through the House Representatives and secured a second reading in the Senate last month.