Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Hansard source

This is not about red tape, transparency or accountability; this is simply siding with the banks, the AMP and other big providers in relation to this. If the parliamentary secretary had listened to the people in rural communities in my electorate who came to see me having lost their savings in the Storm crisis, he would not be making speeches like that. This is a serious matter. There are thousands of Australians who lost their life savings and had to return to work, who lost their homes, who lost their investment properties and whose financial security in the future was trashed by Storm.

There was a parliamentary inquiry in relation to this. We responded. The parliamentary inquiry was actually chaired by the member for Oxley, the shadow minister in relation to this issue. The parliamentary inquiry was held by the Parliamentary Joint Committee on Corporations and Financial Services, which inquired into Storm. It inquired into what happened—how people lost their savings, their investments and their property. As a result of that, the then federal Labor government came up with the Future of Financial Advice bills that went through this place. They were important pieces of reform that made a difference. They were supported by CPA Australia, by National Seniors, by the Council of the Ageing, by the insurance industry and by the superannuation industry, but those opposite have not listened. They did not listen to the parliamentary inquiry. They did not listen to the players and the consumers. They did not listen to CHOICE. They have sided not with the consumers but with the big players.

It is a $1.8 trillion industry. We on this side of the chamber had a part in the creation of that with superannuation not just for the powerful but for teachers, cleaners, farmers and small business operators. We created the superannuation system in this country. Those opposite never saw a superannuation bill that they would not vote against. They vote against them every single time. The superannuation guarantee has gone up under a Labor government every time. As a result of that, people had opportunities to secure their financial future and it was trashed.

This legislation, together with the regulations that those opposite want to bring in, is not even supported by Alan Jones. Even Alan Jones, who is no friend of the Labor Party, does not support what the coalition government is trying to do here. They are not siding with their constituents. Last night they did not side with their constituents in the votes they cast in favour of not just hurting the income they receive but affecting their cost of living in the future.

This legislation and the stuff that the coalition is trying to do are not in the best interests of this country. Let us have a look at what we did and contrast it with what the coalition is proposing. We brought in a best-interest test requiring advisers to act in their clients' best interests. How revolutionary is that? Why would those opposite be afraid of, and worry about, the requirement for advisers to act in their clients' best interests? We also had a provision that required advisers to get their clients to opt-in to receive ongoing service—not every week, not every month, but every two years. How hard is that? We also had a provision in relation to annual disclosure. Statements were to be sent to a client annually disclosing fees and details of services performed. That is not revolutionary or radical in any way, shape or form.

We had a ban on conflicted remuneration—commissions paid by financial product providers to financial advisers. On 20 December last year they announced 'reforms' to change it. It was paused because Senator Sinodinos had problems and opted out of that role. Now we have the Assistant Treasurer, Senator Cormann, involved in this role, but they have not really changed their position.

Let me tell those people who might be interested what they are doing. They are removing the catch-all provision in best interests. This adds a loophole for advisers that means that best-interest will become ineffective. That is what they are doing. They are scrapping opt in, allowing an adviser to continue to charge fees—sometimes without having actively worked on a client's file and definitely without receiving consent from the client. They are amending the annual disclosure provision so that advisers will have to provide annual disclosure only to clients who commenced with them after 1 July 2013. There is a partial lifting of the ban on conflicted remuneration. The ban on conflicted remuneration will apply only to commissions on general advice. This opens the door for a sales push culture of products over advice. That is what is happening here. They should be ashamed of themselves.

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