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Monday, 7 July 2014
Page: 4202

Financial Services


Senator DASTYARI (New South Wales) (14:43): My question is to the still-Acting Assistant Treasurer, Senator Cormann. Why has the Acting Assistant Treasurer made a regulation winding back Future of Financial Advice reforms, despite clear evidence that consumers need protection from financial advice motivated by profit and not their best interests?


Senator CORMANN (Western AustraliaMinister for Finance) (14:44): The government is delivering on the commitments we made in the lead-up to the last election. We are implementing improvements to our financial advice laws which are necessary to deal with the excessive, unnecessary and costly red tape that your government imposed at the behest of the union movement. We do know that the Labor Party is the political arm of the union movement in the parliament. We do know that Industry Super is the commercial arm of the union movement. We do understand that the Labor government worked very closely with Industry Super and with the unions in order to do a special deal for them. What I can say is that our focus is on the best interests of consumers and on the public interest. What we are doing is maintaining and keeping all of the consumer protections that matter.

Senator Cameron interjecting

The PRESIDENT: Pause the clock. Order, Senator Cameron! Some of you on my left have been blessed with great voices, but please do not use them across the chamber constantly.

Senator CORMANN: We are keeping all of the consumer protections that matter. We are keeping the requirement for financial advisers to act in the best interests of their clients. We are keeping the ban on conflicted remuneration, despite the erroneous and dishonest assertions that have been made by various people on the Labor side. In fact, the ABC's Fact Check came out and said that the assertions by shadow Treasurer Bowen that we were reintroducing commissions for financial advisers were inaccurate and scare-mongering. That is not the government saying it; this is the ABC Fact Check saying it. We are keeping in place the consumer protections that matter, but we are getting rid of the excessive, unnecessary red tape that Labor imposed at the behest of the union movement in order to protect the commercial interests of the union movement. We are focused on the public interest—not on the commercial interests of the union movement. I know that Senator Dastyari is very focused on the best interests of the union movement. We believe that not every bit of red tape is good for consumers. (Time expired)




Senator DASTYARI (New South Wales) (14:46): Mr President, I ask a supplementary question. Does the Acting Assistant Treasurer share ASIC's view that the Future of Financial Advice reforms 'should go a considerable way in improving the long-term quality of advice provided to investors'? If so, why has the Acting Assistant Treasurer wound back the reforms?


Senator CORMANN (Western AustraliaMinister for Finance) (14:47): As Senator Dastyari would know, we supported everything that was good with the Future of Financial Advice laws. We supported the introduction of the best interests duty; we supported the requirement for advisers to act in the best interests of their clients; we supported the ban on conflicted remuneration. We did not support the massive increase in red tape imposed on small-business financial advisers but not imposed on advisers in industry funds. We understand that the Labor government was motivated by the commercial interests of Industry Super and the union movement. We on this side of the parliament understand that not every bit of red tape is good for consumers. Where red tape pushes up the cost of advice, it makes access to advice less affordable for many people saving for their retirement, managing their retirement and managing financial risk through life. In those circumstances, red tape is not good for consumers and it should be removed. That is what we are doing.


Senator DASTYARI (New South Wales) (14:48): Mr President, I ask a further supplementary question. Why did the Acting Assistant Treasurer regulate and not legislate the winding back of the Future of Financial Advice reforms? If he is so proud of his changes, why did he make the regulations in the dead of the night and gazette them on 30 June—less than 12 hours before they were due to take effect? Minister, when will you be tabling these regulations?


Senator CORMANN (Western AustraliaMinister for Finance) (14:48): That final proposition is ridiculous. I know that—

Senator Kim Carr: Why?

Senator CORMANN: I know that shadow Treasurer Bowen missed the five-page statement that I released on 20 June, setting out the process to be followed on the improvements to financial advice laws—which we promised at the last election, which we put forward in exposure drafts and which we consulted on for months. On 20 June I put out a five-page statement explaining exactly what we were doing, what we were not doing, the process that we would follow—

Senator Kim Carr: Table it!

Senator Dastyari: I rise on a point of order. I clearly asked a question: when will the regulations be tabled? The minister has not answered the question. When will you table them. Minister?

The PRESIDENT: Senator Dastyari, there is no point of order. Your question was broader than just that.

Senator CORMANN: I was working my way through all of the aspects of Senator Dastyari's question, and I am very happy to table the press release that I put out on 20 June—five pages of it—explaining what we were doing and what we were not doing and also the process that would be followed. I can also assure Senator Dastyari—if you relax a bit, I will give the answer—that the government will table these regulations consistent with the law and consistent with usual practice— (Time expired)