industry & reform
Lynelle Briggs. Photo: Kelly Barnes, AAP
From witness to commissioner
The ramifications of the banking
royal commission on aged care.
By Conor Burke
T
he scores are in, and for those
waiting to see the awesome power
of a royal commission in action, the
final blow seemed no more than a jab.
The handing down of the final report of
the Royal Commission into Misconduct in
the Banking, Superannuation and Financial
Services Industry by commissioner
Kenneth Hayne capped off a year of horror
stories, ranging from charging the dead
fees to predatory sales techniques used
against the vulnerable, and many were
unhappy with the recommendations made.
Among the hearings we were told that
older Australians were being given large
loans that they didn’t understand and were
often bullied into “emotional lending” with
a child or loved one.
“Members of the public have lodged
submissions about advice received where
they could not reasonably be expected to
understand or manage the ongoing risk
associated with the investment. These
include submissions from vulnerable
people such as elderly people and people
with a disability,” counsel assisting Rowena
Orr told the commission.
“In one example, a couple approaching
retirement who had sought financial advice
to set up an allocated pension fund were
convinced to set up a diversified portfolio
and lost approximately $170,000 over the
next 17 months,” she said.
COTA Australia chief executive Ian Yates
welcomed many recommendations of the
10 agedcareinsite.com.au
Hayne royal commission but called for
stronger consumer voices to be supported
into the future.
“The industry’s not going to become
angels overnight, and strong consumer
voices are needed to draw issues and
problems to the attention of the wider
community,” he said.
STRANGE COINCIDENCE
The aged care sector has already seen its
link to the banking industry mirror the stock
losses of the big banks after Hayne’s interim
report, with the shares of the three listed
care providers dropping by 30–40 per cent
during the 2018 calendar year and down
2–6 per cent since the initial hearing.
But in an interesting twist, aged care
commissioner Lynelle Briggs had a part to
play in the banking royal commission.
As chair of the General Insurance Code
Governance Committee, she gave witness
testimony and was mentioned in the
final report.
It states that: “Code subscribers had
conceded breaches of the code in the
course of an investigation on a further
689 occasions, and had self-reported over
13,000 breaches of the code. Despite
this, the Code Governance Committee
had never exercised its powers to impose
sanctions in response to those breaches.”
Jason Harris, professor of corporate law
at the University of Sydney, believes the
report showed no wrongdoing on Briggs’
part but rather made recommendations on
the ability of the committee she chaired to
impose sanctions when breaches occur.
“It seems there was concern that the
committee could only impose sanctions
for failing to rectify breaches, rather than
for mere breaches themselves,” he said.
However, Marie dela Rama of the UTS
Business School believes that Briggs’
involvement raises serious questions.
“It is clear Ms Briggs wears too many
hats, and discharging her duty as
aged care royal commissioner is now
compromised by her appearance in the
banking royal commission report,” she
told Aged Care Insite.
“The release of Justice Kenneth Hayne’s
landmark report on the financial services
industry emphatically showed Ms Briggs
was not fit to discharge her duty in
one of her hats as chair of the General
Insurance Code Governance Committee,
a self-regulatory, self-reporting insurance
industry mechanism.
“By reasons of resources and time,
she needs to familiarise herself with the
Hayne recommendations on sanctions
so that she can properly discharge her
responsibility as General Insurance Code
Governance Committee chair. She needs
to step aside and allow another learned
person untainted by the banking royal
commission to become the next aged
care royal commissioner,” she said.
In his introduction to the final report,
Hayne said: “The damage done by that
conduct to individuals and to the overall
health and reputation of the financial
services industry has been large. Saying
sorry and promising not to do it again
has not prevented recurrence. The time
has come to decide what is to be done in
response to what has happened.”
Already, the same could be said of the
aged care sector. ■