Bill Shorten backs down on huge fines for banks
Bill Shorten has backed down on Labor's push for uncapped fines for white collar offences at banks and companies, instead opting for a maximum corporate penalty of $525 million.
The penalty limit for civil offences for corporations is still more than double the $210 million maximum the government was proposing.
Labor is also seeking to amend the government bill in the parliament to increase jail time for the most serious corporate crimes to 15 years, from 10 years.
"Labor will fight to increase jail time for bankers who do the wrong thing, and set a half a billion financial penalty for corporate crooks," Mr Shorten said in a statement Wednesday morning.
A government source said the Coalition was likely to support Labor's amendments in order to pass the white collar crime penalty legislation.
Under Labor's proposal announced last December, banks and other big companies would have faced unprecedented fines of billions of dollars for civil offences.
Big business was alarmed that Labor's eleventh hour proposal would drive up their insurance costs even if they never cop a fine or do nothing wrong.
Labor's original amendments would have removed the financial penalty cap for corporations, in preference for a maximum fine of 10 per cent of revenue.
Abolishing the government's proposed $210 million cap for corporate civil offences for a maximum fine of 10 per cent of revenue would have exposed companies to huge fines of up to $6.7 billion for the pre-demerger Wesfarmers, $5.7 billion for Woolworths, $4.4 billion for BHP, $4.2 billion for Commonwealth Bank of Australia, $4.1 billion for Rio Tinto, about $3.5 billion for the three other big banks and $2.6 billion for Telstra.
In the wake of the banking royal commission's damning findings into financial services, the Coalition government is seeking to toughen civil and criminal penalties for corporate misdeeds, as recommended by the corporate regulator's 2016-17 enforcement review taskforce.
The government's bill includes doubling maximum jail terms to 10 years and increasing financial penalties for individuals for civil contraventions by five-fold to $1.05 million, or three times the benefit gained, whichever is greatest.
Civil monetary fines for offending corporations would be a maximum 10 per cent of annual turnover, capped at $210 million.
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