Far from being a disinterested arbiter of banking regulation, Kenneth Hayne’s comments about climate change have proven he is just another left-wing representative of the Canberra swamp and the wrong person to head the banking royal commission.
In an address to the Centre for Policy Development (CPD) last month, Hayne argued “a director acting in the best interests of the company must take account of, and the board must publicly report on, climate-related risks and issues relevant to the entity”. Hayne appears to believe climate risk should be considered a fiduciary duty for company directors, which under the Corporations Act would mean it attracts a maximum penalty of five years in prison for a breach.
It is significant that Hayne chose to deliver his remarks to a left-wing think tank. The CPD is funded by organisations such as the Community and Public Sector Union, which is the chief lobbyist for bigger government and more bureaucrats.
It is also significant that Hayne failed to include details to his policy proposal. As a former High Court justice, Hayne should know the perils of poorly worded and vague laws which lack direct accountability. It is also a fundamental principle of the rule of law that legal obligations must be predicable and clear.
In justifying his remarks, Hayne said that “international opinion is clear” and is “now firmly behind the need for all entities with public debt or equity to respond to climate change issues”. The opinions – not facts – of a small cadre of unelected internationalist bureaucrats should apparently decide if someone living in central Queensland gets to have a job.
This is precisely the “negative globalism” that Prime Minister Scott Morrison criticised in a speech to the Lowy Institute earlier this year.
In his speech, Hayne disturbingly asks: “What is there left to debate?” Perhaps we could debate the fact that China is the largest emitter of greenhouse gases yet is unconstrained by the Paris Climate Agreement, or that nuclear power offers a path to low emissions without economic damage yet remains banned in Australia, or that there are many different opinions about climate change – just ask Professor Peter Ridd who was sacked by James Cook University for expressing one – or that the costs of mitigation could exceed adaptation.
Any of these points must be debated in a manner consistent with the values of a liberal democracy like Australia.
Instead, Hayne seeks to shut down debate by accusing those who hold a different opinion of “short-termism” and “learned helplessness”.
Learned helplessness is a psychology term referring to a belief that someone cannot change something they actually can change. Australia, though, is not in a state of learned helplessness. What Australia does will make no noticeable different to the global climate. Even Australia’s Chief Scientist Alan Finkel said that the impact of Australia ceasing all of its emissions is “virtually nothing”.
This is in part why the Paris Climate Agreement exists. Although Hayne may not have mentioned that, because he would then have to recognise that Australia has committed itself to the deepest cuts to emissions per capita in the developed world.
The issue is not just confined to Hayne. High-level executives from the Reserve Bank of Australia (RBA), the Australian Securities and Investments Commission (ASIC), and the Australian Prudential Regulation Authority (APRA) have addressed the CPD on the issue of climate change in the past two years.
That is the same RBA which has only met its mandated inflation target twice in the past 20 quarters, the same ASIC which failed in its oversight of the banking sector, and the same APRA which was slammed earlier this year in an independent review for having a poor culture and “variable leadership”. Yet representatives of those organisations are happy to lecture the rest of Australia on a matter of which they eminently unqualified.
The behaviour of Hayne, corporate Australia, and the unelected regulators poses a big problem for the Morrison government.
At the heart of the government’s agenda is red tape reduction and a reshaping of the bureaucracy to better serve the interests of mainstream Australia.
The work commenced in these areas is good. For example, Ben Morton as Assistant Minister to the Prime Minister is working with the WA Labor government to reduce the approval time of major projects in that state.
But this good work will likely amount to nothing if those who are at the commanding heights of the Australian public service and industry do not even want to debate one of the pre-eminent policy issues of our time.
Morrison is starting to clean out the public service. Next stop should be the RBA, the regulators, and those appointed to senior positions on government boards. Drain the swamp.