Steven Ciobo (Moncrieff, Liberal Party) Share this | Hansard source

For protocol reasons I will refer to the minister as the minister for financial services. He is the person who took the decision that opt-in was in the best interests of financial planners and their clients. It is, to say the least, farcical. This particular requirement will significantly add to the red-tape burden that financial planners face. This significant initiative will add a great deal of extra complexity and extra burden on financial planners. It is not just the financial planners; it is also their clients, who will now be constantly harassed to re-sign with financial planners.

But it is more than that. There is the implementation date that the government is attempting to roll out. This again underscores the shambolic and, I would argue, incompetent manner in which the government has approached these particular reforms. The minister seeks to have these reforms commence on 1 July this year. That is less than four months away. The notion that we could have such significant reform to a sector, commencing in four months, is ludicrous.

For some time the coalition has been calling for the reforms not to commence until 1 July 2013, which incidentally aligns with the introduction of MySuper, knowing full well that rolling those two out concurrently provides maximum opportunity for a more thorough approach to be adopted by industry and more time for systems to be put in place. But, again, the government has not listened. The government insists that 1 July this year will be the start date. I note that, because of the widespread angst in the financial planning community about the consequences of the government rushing headfirst into this and trying to do it within four months, the minister has now indicated that there will be, to use his words, a 'soft launch' of the reforms on 1 July—whatever that means! I believe that the minister has foreshadowed that there will in fact be, as part of this soft launch, further legislation that comes into the parliament in the winter sittings to deal with this issue.

An area on which we can agree—I will touch upon this and conclude on a good note—is the implementation of best interest duty. It is the view of the coalition—and we support the Labor Party on this—that the implementation of a fiduciary duty with respect to the relationship between financial planners and their clients is a positive step forward. We note that the financial planning community itself agrees with this point. It is good that we have consensus. It underscores the bona fides of the coalition in arguing the case that, where good policy is rolled out, we will support it. Where good policy can be implemented, we will not stand in the way; we will do what we can to assist. For that reason, we think decisions to implement the best interest duty is a step in the right direction. That said, of course the devil is always in the detail. In that respect, the first exposure draft that outlined the provisions that would apply to the best interest duty were convoluted and it was not clear to industry or to consumer advocates how it would work.

There will be impacts as well with respect to the opportunity for scalable advice—that is, a need for clients to not have to adopt a whole-of-life plan if a client does not want that. If a client goes to a financial planner and seeks only to have financial advice on one discrete area, the coalition's view is that it is ludicrous to argue that that should not be available. We think it is without basis to say no, that it should only be on a whole-of-life basis, on a know-your-client basis, to such an extent that effectively you achieve overservicing as a consequence of the government's reforms.

My final point is with respect to regulatory impact assessment. We know the government's Office of Best Practice Regulation said that they did not have adequate information to determine whether the FoFA changes and their impact on business and consumers were appropriate. We think that is a great shame. We are committed to less red tape. We are committed to less complexity. The reality is that the amendments the coalition have put on the table are good amendments that should be supported by the government, recognising not only that these are going to be appropriate safeguards for consumers but also that the sector should not be unduly and inappropriately burdened with additional compliance costs.

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