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Wednesday, 24 March 2004
Page: 21868

Senator CONROY (6:02 PM) —Parliamentary Secretary, I am interested in legal advice about imposing massive costs. It must be a very unusual type of legal advice that gives you not legal advice but a financial price. Could you table it so it is available to us? It does seem like unusual legal advice. Let me make a couple of points: firstly, we are here today because the government and the industry wanted the OMC, the ongoing management charge. Two years ago, the Senate courageously blocked it because it did not believe that it was good enough. Consumer testing on the OMC showed that it was worse than nothing because it significantly misled consumers. That is why, ultimately, a majority—Labor, Democrats, minor parties and Independents—voted to defeat it. The government argue that they are trying to help consumers, when consumer testing showed that the OMC seriously misled consumers. Those opposite have said that certain regulations are subject to the disallowance to enhance disclosure. As Senator Murray has so eloquently put it, the problem is that these are fundamentally inconsistent with the piece of legislation that we passed in December.

Senator Murray —Which is now in force.

Senator CONROY —Yes, it is now in force. The government know this, yet they choose to proceed. They have already accepted that we are going to have a new regulation. The parliamentary committee has looked at it. We believe that we have made substantial progress—consumers are going to be better off because of this. If we let these regulations go through, we will be back to square one. `Square one' is the rejected reasonably practicable test. Consumers need disclosure. We do not want a situation where disclosure is made if the product issuer considers it to be reasonably practical, which is what this regulation enshrines. Fees and charges must be disclosed.

The government has also raised the issue of timing. I appreciate the point made by the parliamentary secretary about the committee report, because it only came into the chamber today for everyone to see. The most interesting part of the report is that all of the experts on the committee that Senator Murray described have unanimously recommended to the government that there should be a transition period of six months, to 1 January. That will allow us to fix almost all of those problems that the government is arguing will potentially arise. It was a unanimous recommendation based on an in-depth study. We want to give that six months to end the uncertainty. We do not want to create more by putting in place one set of regulations that we will be phasing out a few months down the track. What the parliament and the Senate are seeking to do today is to give certainty to industry. Why are we here today? For those who remember the debate back in 2002, we are here because during the debate and afterwards, Senator Ian Campbell, who then had carriage of the bill, made it clear that he would not allow any work to be done to create the new OMC or an enhanced OMC or a single bottom line or whatever.

He stood there in the parliament, he put out a press release and he said in the newspapers, `Right; that's it. We haven't got OMC. We're going to have nothing. I'm not going to countenance any work whatsoever.' Remember, Senator Murray and Senator Lees? That was what Senator Ian Campbell said and that is why we are here today. That is why it is being done in such a rushed why. That is why the parliamentary committee said, `We don't have the paperwork,' because Senator Ian Campbell decided that we were not going to progress the issue. It is now two years later and it is five minutes to midnight and the government are coming back talking about uncertainty. They have had two years to clear up the uncertainty, to make their points and have the arguments. Senator Murray is dead right. Parliamentary Secretary Cameron has taken a very courageous position and he deserves the support of the Senate. I hope he gets the support of all of his backbench and all the other ministers.

Senator CONROY —Don't be provocative. We have a situation where members of the government are seeking to undermine Parliamentary Secretary Cameron. They are seeking to undermine the intent of the Senate's decision previously. That is why it is important that we take the stand today. He deserves support for a courageous decision.

Senator Murray —Don't choke on it!

Senator CONROY —I am not. Senator Troeth has set me off. I want to thank the Democrats, the minor parties and the Independents, who are indicating they will support this disallowance motion. This is a victory for consumers today. We are very close to getting what consumers need—a genuine piece of information that is meaningful to them. We are close to creating genuine competition in this sector, so a consumer can pick up one document from one investment and see a figure, they can look at another document from another investment and see a figure and make a price comparison. Ultimately, in a market economy, you need to have a price. You need to have price signals so the market can respond, so that consumers can respond. If you do not give consumers a price, there cannot be a price signal. It creates inefficiency and ultimately that means consumers are paying more than they should.

I thank those who are supporting this motion. I hope the government will reconsider it even at this late stage and be willing to support this disallowance motion and that we can move on and quickly get a solution to this. I think we are very close to a solution in terms of those industry discussions.