THE House of Representatives Standing Committee on Economics has released the final report for its reviews of the Australian Securities and Investments Commission (ASIC) annual reports of 2021, 2022 and 2023.

Committee Chair, Daniel Mulino MP, said the report covered key issues examined by the committee during the 47th Parliament.

Dr Mulino noted that ASIC had been subject to extensive parliamentary scrutiny over the past three years, including by other committees.

"Similar to our colleagues on the Parliamentary Joint Committee on Corporations and Financial Services, the House Economics Committee asked extensive questions about ASIC’s enforcement approach," Dr Mulino said. "Members also probed how ASIC measures and reports on its performance, and whether it is meeting the expectations of both government and the community in fulfilling its role."

Dr Mulino said although the committee acknowledged the challenges ASIC faces in triaging thousands of complaints and tip-offs annually, the committee expected ASIC to continue its efforts to better communicate with the many Australians who reach out for help.

He said the report also discussed ASIC actions under new intervention powers granted after the Hayne Royal Commission, including step-in powers to block poorly targeted financial products.

"The committee was pleased to see early signs of success from ASIC’s use of the new powers, and we encourage ASIC to continue using these new tools judiciously to prevent and take action against wrongdoing," Dr Mulino said.

Dr Mulino said the committee had been particularly concerned by ASIC’s reports of widespread misleading practices in the insurance industry, and urged ASIC to remain vigilant on this issue.

"Alleged insurer misconduct was also a major theme in the committee’s recent review of insurers’ responses to 2022 major flood claims," he said, "where we recommended significantly expanding ASIC’s data-collecting powers for the insurance industry. We were pleased to hear through these annual report reviews that ASIC supports those recommendations."

The report also addressed ASIC’s recent work on other issues and industries, including corporate cyber security obligations, greenwashing and the ASX’s troubled CHESS settlement system upgrade.

www.aph.gov.au

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THE Joint Standing Committee on Treaties has tabled the report on its inquiry into the Convention between Australia and the Portuguese Republic for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance (Australia-Portugal Tax Treaty).

The treaty is a taxation agreement with Portugal aimed primarily at eliminating double taxation for residents of Australia and Portugal, preventing opportunities for tax evasion or avoidance, and strengthening economic ties.

Committee Chair, Lisa Chesters MP said, "Portugal and Australia have a more than 64-year history of strong diplomatic relations. The two countries share a range of priorities, particularly in multilateral institutions, and this agreement will further develop these links.

"It will provide tax certainty for Australian businesses, encourage trade between the two countries by reducing tax barriers, decrease costs to Australian businesses, and enable better access to Portuguese capital and technology. The committee supports the ratification of this treaty."

The report also contains nine minor treaty actions that have been considered and endorsed by the committee:

• Six of these minor treaty actions are amendments to the International Convention for the Prevention of Pollution from Ships 1973;
• Two minor treaty actions concern amendments to the Agreement establishing the European Bank for Reconstruction and Development 1990 and the Articles of Agreement of the International Bank for Reconstruction and Development 1945; and
• One minor treaty action concerns amendments to the Convention on International Trade in Endangered Species of Wild Fauna and Flora.

The report can be accessed online and further information about the inquiry is available on the Committee website.  

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AUSTRALIA'S PRODUCTIVITY continued to stagnate in the December quarter, suggesting that the country's productivity problem may be part of a long-term trend. 

The Productivity Commission's latest quarterly productivity bulletin shows labour productivity declined by 0.1% in the December quarter and by 1.2% over the year.

"The data makes it clear that our productivity problem is not a flash in the pan – this is a long-term, structural challenge that requires dedicated attention from government and industry," said PC Deputy Chair Alex Robson.

In a new article, the PC takes a closer look at the drivers of the COVID 'productivity bubble'. The PC will expand further upon this work in a detailed research paper to be released in the future.

‘The COVID pandemic was a massive global economic shock," Dr Robson said. "The pandemic and the policy response to it drove a sharp rise – and then a crash – in measured productivity. Now that the dust has settled, we're back to the stagnant productivity we saw in the period between 2015 to 2019 leading up to the pandemic. 

"Ultimately the COVID productivity bubble was just that: a bubble. We saw a sharp rise in productivity driven by the lockdowns which was then wiped out as lockdowns ended and hours worked reached record highs," he said.

"There are lessons to be learned from these fluctuations, but they aren't likely to have a meaningful long-term effect on productivity.

"The real issue is that Australia's labour productivity has not significantly improved in over 10 years. With global policy uncertainty again on the rise, addressing productivity directly via targeted reforms will be the best way to sustainably boost Australians' living standards," Dr Robson said.

"To that end, the PC is undertaking a program of five inquiries, each focusing on a different pillar related to productivity. We will identify the highest priority reforms under each of the five pillars which will improve Australia’s long-run productivity growth."

www.pc.gov.au

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THE Joint Committee of Public Accounts and Audit has today published the report of its inquiry into the administration of Commonwealth regulations.

The inquiry was informed by audits into regulatory responsibilities of five entities: Department of Health and Aged Care; Aged Care Quality and Safety Commission; Department of Home Affairs; Department of Industry, Science and Resources; and the Australian Taxation Office.

These audits dealt with: management of non-compliance with the Therapeutic Goods Act 1989 for unapproved therapeutic goods; early implementation of aged care reforms; regulation of migration agents; trade measurement; and the management and oversight of fraud control arrangements for the goods and services tax.

Chair of the committee, Linda Burney MP said, "Government regulation has a profound effect on the daily lives of all Australians. When it is administered effectively, regulation protects the public interest, ensures the efficient delivery of services, promotes trust, and improves community safety and wellbeing.

'The committee found that overall the agencies were meeting their requirements but there are areas where improvements could be made. We noted gaps and inconsistencies, as well as partial regulation and, in some cases, failure to regulate effectively."

During the inquiry, the committee also examined the adequacy of the current principles-based policy guidance from the Department of Finance and found regulators required more practical advice on how to go about their regulatory responsibilities.

"To ensure improvements, we made nine recommendations. These deal with specific entity shortcomings discovered during the inquiry, the need for greater transparency and accountability, and the nature of policy advice," Ms Burney said.

The report can be downloaded from the Committee website.

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