Sam Rae (Hawke, Australian Labor Party) Share this | Hansard source

There's nothing that says bipartisanship like a torrent of dusty drivel from a bloke who wasted a decade as a cabinet minister in the Morrison government overseeing policy failure and being party to inaction. When it comes to addressing all such matters, finally we have had the Albanese government elected, and within 12 months we have brought forward substantive progress when it comes to these very important TLABs. The reality is that the Australian people can see through the petty political games, the shifting of responsibility and the crab-walking away from the pathetic legacy that those opposite have.

I'm very pleased to rise to speak on the Treasury Laws Amendment (2023 Measures No. 3) Bill 2023, which focuses on improving the experience of consumers across four key areas. Schedule 1 addresses the avoidance of certain product intervention orders by credit providers. Safe, well-regulated consumer markets for credit products are a core element of a strong and, importantly, inclusive economy. When properly managed and responsibly sold, credit products can assist working Australians in establishing financial security and independence, such as through a mortgage on a home.

However, there are too many predatory credit products that take advantage of people who are already financially vulnerable and which, in some cases, charge excessive and unreasonable fees and interest. These exorbitant fees often result in their customers being unable to pay their debts and this, sadly, often results in their customers seeking other similarly predatory credit products to pay them off. It is a cruel cycle. This debt cycle can spiral and leave consumers struggling to get out from underneath it. That is why the Albanese Labor government introduced long overdue reforms of the regulation of payday lending and consumer leases through the Financial Sector Reform Act 2022. This legislation implanted our response to the review of small amount credit contract laws conducted way back in 2016. Despite being conducted seven years ago, the former Liberal government did not adequately respond to the review through legislation. Put simply, the Liberals hung consumers are too dry, as predatory lenders were able to continue to offer dodgy credit products due to a lack of sufficient regulation.

The anti-avoidance provisions in the Financial Sector Reform Act 2022 are aimed at reducing the risk of consumer harm from predatory lenders, who modify their business models to avoid the application of the consumer protections in the credit act and other financial services legislation. The provisions also extended to Australian Securities and Investments Commission, ASIC, product intervention orders, made under the National Consumer Credit Protection Act 2009—that is, the one we refer to as the Credit Act. The legislation before the House today builds on the Albanese Labor government's response by further tightening anti-avoidance provisions.

Schedule 1 to this bill ensures anti-avoidance provisions also apply to ASIC product intervention orders relating to credit products that are made under the Corporations Act 2001. ASIC has identified credit products that it has said cause significant detriment and harm, especially to vulnerable consumers and has issued several product intervention orders to address this harm. These product intervention orders were made by ASIC under the Corporations Act 2001 and not the credit act, to help ensure the avoidance behaviour of predatory lenders is adequately captured by the law. But the anti-avoidance provisions in the Financial Sector Reform Act 2022 do not apply to these PIOs. These changes will ensure anti-avoidance provisions apply to PIOs made under Corporations Law. This will reduce the risk of harm and limit the operation of predatory lenders who are engaged in active avoidance behaviours.

Schedule 2 of the bill gives recognition to the value of experience in the financial advice industry. The Albanese Labor government is committed to ensuring Australians have access to high-quality financial advice by driving strong professional standards in this industry. While education requirements for financial advisers help in driving the standard of advice, the number of practising advisers has decreased by over 40 per cent since its introduction. Unfortunately, this includes experienced financial advisors without any history of misconduct. Clearly, the current requirements do not properly balance the desire to professionalise the industry with the benefits of retaining an experienced and skilled workforce because they fail to appropriately recognise that important professional experience.

This has, unfortunately, made access to financial advice so much more difficult and, consequently, put substantial downward pressure on quality standards.

Schedule 2 to this bill ensures consumers continue to have access to high-quality advice by removing a significant disincentive for experienced advisers to stay in the industry. Experienced advisers make a valuable contribution to the financial advice industry. They play an integral role supervising new entrants during their professional year and sharing their knowledge and experience more broadly across the industry. Importantly, consumers can still be sure of receiving high-quality advice as those experienced advisers affected by this amendment must have at least 10 years of experience, have a squeaky clean record and pass the financial advisor exam.

The third area of focus of this amendment is competition in the clearing and settlement of cash equities. Schedule 3 to the bill implements recommendations made by the Council of Financial Regulators to strengthen regulatory powers and facilitate competitive outcomes in the market for clearing and settlement of cash equities. The ASX group has a monopoly over these services, and these reforms will have significant benefits for businesses that compete with ASX in other parts of the cash equities market—for example, financial market operators. It will also benefit those who rely on ASX's monopoly on clearing and settlement services, such as clearing and settlement participants and share registries.

The facilitation of more competitive outcomes in this space can decrease costs and drive innovation by ensuring transparency around fair pricing. This is a matter very close to the hearts of both me and the member for Forde, who work very close together on the House Economics Committee and who are in the process of exploring such matters through our competition inquiry. This schedule ensures that if a competitor does emerge in the provision of cash equities clearing and settlement, ASIC will be able to ensure that competition is safe and effective. If a competitor does not emerge, rules will ensure competitive outcomes can still be achieved by allowing ASIC to make rules regarding the activities, conduct and governance of clearing and settlement facility licensees. This is intended to ensure that these services are provided on fair, reasonable, transparent and, importantly, non-discriminatory terms.

The reforms in this schedule will also enable ASIC to write rules relating to governance of clearing and settlement facilities, including rules related to board composition and user input to governance. This will have the additional benefit of allowing ASIC to make rules which apply to the governance of the ASX's CHESS replacement project, the delay of which has resulted in significant costs to the wider industry. Where clearing and settlement services are provided by an entity which enjoys a monopoly or significant market power, arbitration will be available to industry participants that rely on access to clearing and settlement services to resolve any disputes about the terms and conditions of their access—including, importantly, price. This is intended to be a final but efficient backstop where good-faith commercial negotiations break down. It has been largely modelled on the national access regime in the Competition and Consumer Act 2010, with some changes to improve the efficiency of the arbitration process and provide timely outcomes for all parties.

The final area of focus of this amendment is changes to the First Home Super Saver Scheme. Say that fast a number of times!

Schedule 4 makes several improvements to the operation of the scheme to ensure that it works as intended for the first-home buyers who choose to make use of it. As it's currently written, the underpinning legislation is inflexible and can occasionally result in a poor user experience, including some people who have made an error in the application process having their savings unintentionally locked in superannuation until retirement. This amendment will improve the implementation of the scheme to ensure it works as intended. The amendment will also provide greater flexibility for first-time buyers using the scheme to amend or revoke their First Home Super Saver scheme applications to correct errors and help ensure their savings are released.

Superannuation should not be released early without care. It's a simple statement. It's one that I wish the former government had paid more attention to. However, it is clear that in these cases it is unfair to the applicants to withhold the voluntary additional contributions they made for the purpose of purchasing the first home within the scheme guidelines. This amendment will increase the discretion of the Commissioner of Taxation to amend and revoke FHSSS applications and will allow individuals to withdraw or amend applications to the scheme prior to release. The amendment also contains transitional provisions that ensure that this flexibility is extended to applications made since 1 July 2018, as well as to users who have previously applied to have funds released under the FHSSS and have since started holding a relevant interest in real property or land. This is a fair provision that allows those who have unwittingly had these savings quarantined to get access to them. I think it is worth stressing that it is in no way a continuance of the super raiding that was encouraged by the former government and has ultimately led to the erosion of the capital base of working people in our country.

This bill is about implementing sensible reforms to the financial services sector, financial regulation and the implementation of government schemes. It's about ensuring that Australian consumers can enjoy a well-regulated, competitive and user-friendly financial marketplace.

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