Bill
Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Bill 2018
passed, as at 2018-02-20. Treasury portfolio.
- Sponsor
- Not recorded
- Portfolio
- Treasury
Recorded stages
- introduced — 2017-10-19
- second reading — 2017-10-19
- second reading — 2018-02-05
- second reading — 2018-02-05
- committee — 2018-02-05
- third reading — 2018-02-05
- introduced — 2018-02-06
- second reading — 2018-02-06
- second reading — 2018-02-06
- second reading — 2018-02-07
- committee — 2018-02-07
- third reading — 2018-02-07
- passed — 2018-02-07
- royal assent — 2018-02-20
Divisions
- The majority voted against [amendments](https://www.openaustralia.org.au/senate/?id=2018-02-07.8.1) introduced by Tasmanian Senator [Peter Whish-Wilson](https://theyvoteforyou.org.au/people/senate/tasmania/peter_whish-wilson), which means they failed. ### What do these amendments do? Senator Whish-Wilson [explained that](https://www.openaustralia.org.au/senate/?id=2018-02-07.8.1): > *This amendment in a nutshell directly relates any penalties or punitive measures to accountable persons or executives to their size under this scheme. We believe that an ADI, an authorised deposit-taking institution, which is liable for pecuniary penalties, should receive a penalty in line with their company size or their value. So the bigger the bank the bigger the fine. It's pretty simple and it's outlined in the amendment. We believe that the maximum amount of pecuniary penalties is an amount at the rate 10 penalty units for every million dollars in assets for those ADIs that are captured by this legislation.* ### Amendment text > *(1) Schedule 1, item 1, page 20 (lines 8 to 25), omit section 37G, substitute:* > > *37G Pecuniary penalty for non-compliance with this Part.* > > *(1) An ADI is liable to a pecuniary penalty if:* > >> *(a) an ADI contravenes its obligations under this Part (other than this Division); and* >> >> *(b) the contravention relates to prudential matters.* > > *(2) The maximum amount of pecuniary penalty is an amount at the rate of 10 penalty units for every $1,000,000 in assets, of the ADI within the control (however described) of the part of the ADI's banking business that is carried out in Australia.* > > *(3) In determining the pecuniary penalty, the Federal Court of Australia must have regard to the impact that the penalty would have on the viability of the ADI.* > > *(4) Subsection (3) does not limit subclause 1(3) of Schedule 2.* > > *(5) This section is a civil penalty provision.* — 2018-02-07, Senate: negative, ayes 14, noes 29
- The majority voted in favour of [amendments](https://www.openaustralia.org.au/senate/?gid=2018-02-07.24.1) introduced by Tasmanian Senator [Peter Whish-Wilson](https://theyvoteforyou.org.au/people/senate/tasmania/peter_whish-wilson), which means they'll now be included as part of the bill. ### What does the bill do? Senator Whish-Wilson [explained that](https://www.openaustralia.org.au/senate/?gid=2018-02-07.24.1): > *No-one can justify the salaries that are paid by shareholders to the bank CEOs in this country. Our banks are some of the most profitable in the world and our CEOs are some of the most highly paid CEOs in the banking sector on the planet. These amendments before us today, amendments (1), (2) and (3), will put a cap on both variable and fixed remuneration.* > > *Fixed salaries are 10 times average weekly earnings, which roughly works out at about $850,000, double what our Prime Minister makes, so bank CEOs still make a lot of money. The variable component's half that, so it still takes them to well over a million dollars.* ### Amendment text > *(1) Schedule 1, item 1, page 4 (line 15), after paragraph 37(1) (b), insert:* > >> *(ba) its executive remuneration obligations; and* > > *(2) Schedule 1, item 1, page 12 (line 18), before Division 4, insert:* > >> *Division 3A—Executive remuneration obligations* >> >> *37DC Cap on remuneration of accountable persons* >> >>> *(1) The executive remuneration obligations of an ADI are to ensure that the ADI does not pay an accountable person of the ADI remuneration for a period (the pay period) that would result in the remuneration of the accountable person for the pay period exceeding the remuneration cap for the pay period.* >>> >>> *(2) The remuneration cap for an accountable person of an ADI for a period starting in a reporting period for the ADI is the amount worked out using the formula:* >>> >>>> *number of days in t h e period number of days in t h e reportin g period x 10 x AAWE* >>>> >>>> *where:* >>>> >>> — 2018-02-07, Senate: affirmative, ayes 38, noes 3
- The majority voted in favour of a [motion](https://www.openaustralia.org.au/senate/?id=2018-02-07.36.1) to read the bill for a third time. In other words, they voted to pass the bill. Because it had already been passed in the House of Representatives, it will now become law. ### What does the bill do? According to the [bills digest](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1718a/18bd070), the bill was introduced to: * *apply new accountability obligations to senior executives of authorised deposit-taking institutions (ADIs) and* * *introduce a civil penalty regime alongside enhanced powers for the Australian Prudential Regulation Authority (APRA) to rely on in the event ADIs and certain accountable persons fail to meet the new obligations.* — 2018-02-07, Senate: affirmative, ayes 38, noes 3
Plain-language summary
No machine-written summary in this export.
Sources
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