Jamie Briggs (Mayo, Liberal Party, Chairman of the Scrutiny of Government Waste Committee) Share this | Hansard source

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—

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

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