Subjects: Airport security; AUSTRAC and CBA record penalty agreement.
Minister for Home Affairs Peter Dutton good enough to join us again this morning. Peter, thanks for your time.
Morning Darce. Pleasure.
Peter as Darce said there, you told us that you were going to beef up security for domestic flights. Clearly you had a bit of insight into what was going on. Tell us how close – the headline on the Melbourne Herald Sun this morning says: exclusive, inside Etihad terror plot, 20 minutes to disaster, meat-mincer bomb timed to detonate shortly after take-off, accused plotter rotting in Beirut jail pleads innocence.
Well Ed, it was very close. Obviously there are matters before the court at the moment, so I can't comment on those, but airports are a real threat as we know – we've seen it around the world – and 400 people or so on an A380 being blown out of the sky would be, of course, a massive human disaster, but a big disaster otherwise for people on the ground obviously, for the economy, for our reputation as a safe destination – we have millions of tourists coming here each year – so there's not only that massive human cost, but also a big economic cost.
So we have ramped up the security settings at the airports and we've got new technology that's being trialled in Melbourne actually, about 360-degree X-ray and CT scans, all of that technology because we've got to be realistic about the threat.
Hey Peter, I think no one has been more clear and stronger on their ability to hold to account people who are running organisations that are of criminal nature. I think you've deported more people who have got dual nationality than any other Minister before in your area, but yet we read today the Commonwealth Bank, who are going to pay a record fine of $700 million, but they have effectively pleaded guilty to laundering money for criminals in the same context.
Does that fine go far enough Peter or do we think that perhaps people at banks should be held a bit more to account like you are other people who commit crimes in our country?
Well the CBA's paid a massive price; $700 million not to be sneezed at, but there's some pretty serious offences and criminals worked out pretty quickly that there was a flaw in the Commonwealth Bank arrangements where you could deposit money into these Intelligent Deposit Machines and word spread; lots of criminals decided that they would pump money in through these machines and ultimately the idea of the legislation is that we can ask the financial…or demand the financial institutions report transactions of $10,000 or more, money going into terrorist organisations or going into organised crime groups involved in distribution of ice and drugs etc.
So there wasn't criminal activity at the CBA. It wasn't a deliberate act of trying to conceal this. It was a failure in their systems and it was a pretty egregious failure – so 53,000 cases where there wasn't a reporting of, where there was a requirement to report under the Act.
They got it terribly wrong, they've paid a big price and I think they realise that they've stuffed up big time, but hopefully it's a lesson now for the other banks and the other financial institutions that AUSTRAC is a pretty serious organisation and they've been able to deal with this.
I think now other banks realise that the culture has to change, that they need to make sure their systems are working and not take it for granted; have all of that risk mitigation in place because if that money ends up in the hands of a terrorist group that commits an offence anywhere, but including here in Australia, then people would never forgive them.
Peter, with this news and obviously a bunch of the allegations that have come out during the Royal Commission into the banks. Does it seem a bit weird in retrospect that your Government resisted the Royal Commission for so long? Clearly, there's massive problems with the Australian banks.
Well I think as the Royal Commission is showing there are cultural issues. I think it's pretty hard to say when you don't have the evidence in front of you, or you aren't aware of the systemic nature of the problems within the banks that automatically a Royal Commission's the answer.
I think there was a number of changes that had been proposed by the Treasurer around trying to tighten up on the banks, getting them to change their culture, but – and if you go back five or six years and say: well, you know, why didn't the previous government do it? and all the rest of it – but the fact is it's been done now.
I think it's going to change the culture at some of the banks. I think the banks realise that they're not above the customers, they're not above the shareholders, they're not above the regulators in this case where AUSTRAC had to impose this fine or work through the problem with CBA. So I think good comes of it.
I hope that people have more faith because in the end, if you have a look at the GFC that struck, people in America lost their savings, were sent broke because banks collapsed and in Australia we've got strong banks, but we need to make sure that they're taking care of their customers first.
Just one final one on that Peter. You mentioned the Global Financial Crisis; I think only one person went to jail in America after that and it almost brought the world down. Do you think that Directors and/or Executive officials in the administration of these major banks need to be more accountable? Because really, let's be honest, $700 million; rounding error for the Commonwealth Bank.
There's a big regime in Australia at the moment that's, I think, probably different to many other countries. I just think we've got a different culture here. The media provides more scrutiny. I think the banks now realise that those certain practices, they're a thing of the past and if there was something like a GFC where people had fraudulently entered information into the system, then they would be going to jail in our system.
I think there's a big difference; the prudential regulation in Australia, the capital adequacy laws mean that we've got pretty strong banks and that they can resist those sort of shocks – and you need that because if people don't have faith in the money that they've got invested in the bank, or they've got a business or a house loan and they think that it could be called in at any stage and they'd have no hope of paying it – that's not the culture of our banks here and it's taken a long time to get to that point.
So I think we've got a pretty robust system, but as I say the culture and the attitude needs to change and I think it is in the process of changing for the better.
Thanks Peter. Thanks for your time this morning and more strength to your arm in the scrutiny of people coming in, particularly on the airlines. Thank you very much for that this morning.
See you guys.