Black, David, Phillips, Harry C. J., The Australian Journal of Politics and History
July to December 2000
During the second half of 2000 there was much speculation as to the likely date of the next election. Eventually Premier Court ruled out a pre-Christmas poll after the so-called Finance Brokers' Scandal continued to draw adverse publicity. Difficulties in the major portfolio areas of health, education and transport also bedevilled the government while several ministers came under fire for actions that were alleged to have breached expected standards of ministerial conduct.
The Finance Brokers' Scandal
On 5 September the three-member inquiry team under the Public Sector Management Act chaired by retired Judge Ivan Gunning tabled its first report containing criticisms of the Finance Supervisory Board and public servants. Opposition Leader Geoff Gallop immediately called for the dismissal of Doug Shave as Fair Trading Minister but Premier Court, despite indicating he would dismiss Shave if it were shown he had not handled his portfolio responsibly, stood by his Minister. The Premier also supported Police Minister Kevin Prince, whose earlier business partnership with one of the "dodgy brokers" had only come to light when the scandal erupted. Investor advocate, Denise Brailey, who had gained prominence with her decision to stand against Minister Shave in his Alfred Cove seat, slammed the Gunning report as a waste of money. In response, Premier Court indicated his government would establish a panel to implement the twenty-eight recommendations including proposals for improved registration and licensing procedures with bankrupts and for people convicted of personal offences to be barred from the industry. Brokers, too, were to be personally liable for losses caused by false information while independent property valuations and the credit history of borrowers were to be provided to lenders. In addition, the roles of Ministry staff and the Supervisory Board members were to be more clearly defined.
The second Gunning Report was tabled in mid December after Parliament had risen. Cabinet immediately agreed "in principle" to the 52 recommendations. These included the establishment of an independent disciplinary tribunal with judicial powers within the Justice Ministry to replace the Fair Trading Ministry's industry watchdog boards, and the scrapping of seven licensing boards and the Building Disputes Committee in favour of one single authority to license finance brokers, builders, car dealers, land valuers, and real estate and settlement agents. On this occasion the Gunning Committee made no further reference to serious or systemic problems in the industries under review. With reference to both reports critics argued that the recommendations were about future reforms rather than gaining redress for those who had been the victims of past practices and it was also questioned whether removing some functions from the Fair Training Ministry might leave consumer protection impotent.
Meanwhile, the members of the Legislative Council Select Committee into the Finance Broking Industry headed by Labor MLC Ken Travers in its final report called unanimously for either a Royal Commission or for a re-appointed Gunning inquiry to probe the industry's continuing and unresolved problems. However, Shave rejected the need for a further full scale inquiry and again denied any responsibility for investors' losses. The Travers Committee had contended that lawyers, auditors, borrowers and valuers, not just finance brokers, had been the key to many retirees losing their life's savings. It also concluded that the Finance Supervisor's Advisory Board was ineffective in administering the Act, and that the Ministry of Fair Trading had failed to conduct a number of investigations with "due diligence" and had responded defensively and inadequately, particularly after the industry's problems had become public in 1998. Another recommendation was that the government provide financial assistance to all investors involved in test cases who were seeking to determine legal issues surrounding investors' entitlements while seeking to reach agreement with investors over compensation and assistance without expensive court action. …