Werewolves of Canberra

Hey, do you remember the Kelly Clarkson, Stronger (What Doesn’t Kill You)? 

I don’t, honestly, but its historical significance is undeniable: it was famously used by presiding judge Diana Wood as supporting evidence to dismiss a 2012 claim of copyright infringement against Kanye West in the United States Court of Appeals for the Seventh Circuit.  

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West’s 2007 hit, Stronger, had allegedly plagiarised a song of the same name by rapper Vincent Peters; the court’s decision argued that the lyrical content referenced the same Nietzchean aphorism that had been “repeatedly invoked in song lyrics over the past century”. 

According to most historians – I did a quick poll, trust me – pop music’s Twilight of the Idols moment represents one of the two biggest events of 2012. The other, of course, was the release of the St. John report on the collapse of Trio Capital. 

In that report, Richard St. John argued that should the Australian government establish a Compensation Scheme of Last Resort, it would need to consider circumstances where “the insolvency of a licensee or licensees leads to compensation liabilities that exceed the capacity of the sector in question”. 

Should this occur – as it notably has done every year since the CSLR’s commencement – St. John recommended drawing on levies from other sectors where “a linkage can be established”. 

As an example, he suggested that “the scheme might be empowered to seek a co-contribution from the funds management sector on the basis of that sector’s reliance on financial advisers to distribute their products”. 

Today (22 May), the consultation closes on Treasury’s CSLR reform proposals, and one wonders how many submissions from advice firms have made that exact same argument (much as Clarkson, West and Peters did with Nietzsche). And given the ample precedent for reforming the CSLR – which, as above, precedes the scheme itself by more than a decade – one hopes policymakers will take their feedback on board.  

Assistant Treasurer Daniel Mulino seems cognisant of these concerns. Speaking on a recent FSC webinar, he acknowledged the need to “improve the predictability and structure of funding arrangements” for the CSLR, but cautioned that the scheme’s costs shouldn’t be paid by “everybody on some arbitrary formula”. 

Plus, he added, when it came time to pay, everyone’s first choice was always “not us”.  

Shadow Minister for Financial Services, Kevin Hogan, meanwhile, told attendees at the Stockbrokers and Investment Advisers Association (SIAA) annual conference this week that targeting wrongdoers was having a knock-on effect on those doing the right thing. 

“We’re regulating for the evil of the 2 per cent but we’ve got to be very cautious we don’t make it too expensive for the other 98 per cent. We have less advisers for this very reason.”  

Hogan added that “the road to ruin is often paved with very good intentions, and a lot of that happens in that building in Canberra”. 

This time, let’s hope not.