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Wednesday, 21 March 2012
Page: 3888


Mr BRIGGS (Mayo) (12:50): It is a pleasure to follow the member for Mitchell and what I thought was an outstanding contribution to this debate on the Corporations Amendment (Future of Financial Advice) Bill 2011 and cognate bill. Like him, I have had numerous small businesses—the people those on the other side do not like to hear about—contact me in the last little while to make the point that this is flawed legislation and should not go ahead in its current form. They have also made the point that the amendments proposed by the shadow Assistant Treasurer, Senator Mathias Cormann, should be considered by this parliament because, like much of the work Senator Cormann does, these recommendations are based on the reality of the situation, not just the political vested interests which the minister responsible for this is constantly and forever in pursuit of. The 'Minister for Vested Interests' is all about making sure that people in protected positions in this industry—namely, the industry super funds—are the best looked after. And the protections put in place by the minister in this legislation will increase the cost for consumers. It will be under the basis of 'being fair and protecting people'; it will be under the usual Labor Party pretence that they are trying to look after the small guy. But this legislation will make it much more expensive and difficult for consumers to get the advice they need.

The member for Mitchell eloquently outlined the importance of financial literacy in Australian society. Financial advisers, particularly those small businesses based in communities and accessible to the consumer, get access to that financial advice from people who are expert in the field and are able to provide that advice. What the Labor Party and this minister will have you believe is that somehow a piece of government legislation will protect people from making a bad financial decision. They will have you believe that you can create legislation which protects people always, that you can protect people against a bad employer, that you can protect people against a bad financial decision. This is the nanny state at its worst. Ultimately, the terrible examples that we have seen where people have lost money have occurred because they have been given inappropriate advice. The Ripoll inquiry in 2009 observed that:

The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.

That is absolutely spot-on, because ultimately this legislation is based on the premise that a piece of legislation can stop people from making the wrong choices. Therefore we see this massive overregulation, which was outlined by the member for Mitchell quite well, on which even the government's Office of Best Practice Regulation, which is a bit of a joke term in itself, made the comment that in their view this was inappropriate legislation and far too great a regulatory burden. It is a regulatory burden particularly to those small businesses out there who are trying to help their local communities and their consumers understand their financial future better.

We need Australians to better look after their financial future. We have significant cost pressures coming at government services, which was so well outlined by the best Treasurer this country has ever had, Peter Costello, in the Intergenerational report, where he highlighted the details of how much extra spending will be required for the Commonwealth and the states to deal with the ageing population. He also made the point that the revenue implications of a reduced workforce as the baby boomers retire will make it harder for governments to meet what they should do and do well at a minimum. That is why ensuring that Australians have their best financial interests at heart and are planning properly so they can be sustainable in their retirement is such an important goal. There should not be legislation that makes that harder. There should not be legislation which operates under the premise of protecting people from themselves while making it more difficult for that to occur.

I mentioned at the beginning of my speech that this bill inevitably—and it is the case with so many of the superannuation bills before the parliament—is designed to favour people the minister is more particularly inclined to agree with when it comes to these matters. It is no coincidence that the Prime Minister ensured during the last ministerial reshuffle that she kept employment and workplace relations together with financial services and superannuation under the same portfolio. You might wonder what the connection is. It is unusual; it has not been done before. Financial services has usually been in a portfolio outside of workplace relations. This time they have been combined.

You can see that this bill, like two other bills before the House at the moment, is about ensuring that the protected and privileged position of industry super funds in this space continues. There are provisions in this bill which make it much better for the industry super funds at the expense of the small providers. We see it with other pieces of superannuation legislation before this parliament. And you know it is true because these issues were raised last week by the Leader of the Opposition—appropriately, because it is something we will be pursuing if we are fortunate enough to be elected to government. This close link between industry super funds, unions and the Australian Labor Party needs very close examination. There will be—

Ms Rishworth interjecting

Mr BRIGGS: No, there is the old industrial club. There are employers organisations, absolutely.

The DEPUTY SPEAKER ( Ms Grierson ): Order! Member for Mayo, refer your remarks through the chair. The member for Kingston!

Mr BRIGGS: I make no deference in that respect. This is an issue we will continue to push because there is a sensitivity. You know there is a sensitivity because, on the very day that the Leader of the Opposition made some very calm comments, the President of the Australian Council of Trade Unions was out there trying to blow up the whole thing. It is a very sensitive issue when it comes to what these people are doing with other Australians' superannuation entitlements and how it will affect their financial security in the future. This bill makes it worse, it has to be said.

The provision which needs to be closely examined, and Senator Mathias Cormann has done some very good work in this respect, is the opt-in provision. This is where the favour is returned to the industry super fund network. We know that because the only people during the Ripoll inquiry who argued for opt-in were the industry super network. They were the only group of people who argued for it, but somehow they became a major base of the legislation. They became a major point in this legislative reform. Somehow this opt-in provision, which, of course, benefits big advisers to the detriment of small advisers, became part of this reform. This has to be changed, absolutely. This is one of the major reasons the coalition will oppose this bill, unless the Labor Party and this minister wise up and adopt our proposed amendments. Our amendments will make this bill workable. They will create a reasonable piece of legislation, which is what the industry wants. I am sure many members have received their small business financial advisers' views on this, and they are one and the same. They all say, 'Please, don't tie me up in this red tape. Please, don't drag me down and try to stop me from doing the job that I have been pursuing as an entrepreneur, as a small business person and as a skilled artisan in this field, helping fellow Australian consumers understand their financial obligations and opportunities better.' This piece of legislation does the exact opposite. It seeks to favour the big over the small. It seeks to favour friends over those who are not friends of the Australian Labor Party.

It is a real shame that this piece of legislation has come to this parliament in this way. That is why we oppose it. That is why we say there is a better way to deal with this in the future. But, as I said, this is so consistent with what the Australian Labor Party is doing in government. For instance, we see a start-up date, as the member for Mitchell and the member for Higgins so rightly outlined, which is far too quick. With the industry screaming and saying, 'We can't possibly do this. We can't possibly achieve this start-up date,' this legislation, at the very least, should be put off to take that into account so that the industry can deal appropriately with the red tape nightmare that is being thrown their way.

I say again that the coalition opposes these bills. I congratulate Senator Mathias Cormann on the great work that he has done in this area. I urge the minister, who has so many vested interests, to reconsider the pursuit of this and the pursuit of small business which is making it more expensive for Australian consumers and putting at risk their financial security in the future as it becomes harder for them to get advice. This is too important an area to play politics with, and that is what this minister is doing. It is a great shame. The bills should be opposed.

Debate adjourned.

Sitting suspended from 13 : 02 to 16 : 00