Peter Whish-Wilson (Tasmania, Australian Greens) Share this | Hansard source

The Greens will also be supporting this disallowance motion. This is as much about process as it is about policy. Just yesterday my colleague Senator Penny Wright asked me how she could find an independent financial planner because Penny and her husband want to get some financial advice. It is actually a really good question. What became really obvious during the Senate inquiry is that independent financial advisers, in the true sense of the word, are a small minority in this country. The majority of financial advisers and financial planners—and many of them are small—are actually still tied in many ways, shapes and forms to large financial services companies who have the product platforms and who manufacture the products.

The clear message that we got in the Senate inquiry from people such as CPA Australia and even independent financial planners was that in a generational or two—and it is going to take that long—they want to see a country where most of the advice provided on financial products is provided by independent financial planners who charge a fee for service and who are not remunerated on a sales basis. They want to see the industry transform into that industry. They want to see confidence and trust come back into the industry and these FoFA laws were designed to do that.

As I made it clear at question time today, it became obvious during the Senate inquiry when the lobby groups representing the big end of town—the big banks—said that they had had an agreement with the previous government and the current government to get changes made by 1 July. And in exact words that I quoted in question time today, technical amendments would be 'sorted out' by 1 July.

It is our job here to legislate for public interest, not for special interests. It is very clear by the reaction that Senator Dastyari has eloquently spoken to, consumer groups and advocacy groups across the country—really important advocacy groups like Seniors Australia—are not convinced that we have the balance right. They are not convinced that we have enough trust or confidence yet in the financial planning industry.

I started by saying that this is as much about process as it is about policy—good process and good policy. This was being rushed by the government before 1 July, and it was brought through in the form of regulation. At some point in time it would come back to legislation in front of the house. The clear message sent was that the government knew it would not get its regulations through the Senate, because they were not only contested by the Labor Party, the Greens and other crossbenchers in this chamber, such as Senator Xenophon, but also contested in the public sphere and in the financial media.

Yesterday I talked about the collapse of Barings Bank. For those who have seen the movie Rogue Traderit really was a bad apple that brought down one of the oldest and most prestigious banks in financial history. But it was not just a rogue trader that brought down that bank; the culture in that bank allowed that type of behaviour to go on and on and on—undetected. It was no different from what we saw at the Commonwealth Bank. That culture is really simple; it is a culture of making profits; that is what banks do. Let's not kid ourselves, banks make profits for shareholders and they try to make increasing profits every year. That is their culture plain and simple. Selling financial products, be it general advice or personal advice, to their customers—and they have enormous customer bases—is how they have made their money for nearly a decade now and it is how they plan to make their money in the next decade. This is serious dollars.

But what is good for banks and their profits and their shareholders is not necessarily good for consumers of financial products in this country. That sales based culture is still allowed under this government's FoFA amendments. The 'balanced scorecard approach', or whatever you want to call it, is still an incentive for an employee at the front of the office to sell products to people walking in the door. That is what the banks wanted clarified, and those are the technical amendments they said the government had guaranteed it would get through by 1 July. But it does not change the culture. Speak to the independent financial planners—the industry they want to see in 10 or 20 years time of small independent advisers in this country. I have met a lot of them in this inquiry. They are good people and they do a good job. But we are never going to transform this industry if we do not have a tough set of regulations that lay down the law. Sometimes the regulations have to be simple to be noticed.

This is about restoring confidence and trust in the financial planning industry, which wants more Australians to seek financial advice. Rather than rushing through regulations to support the banks, we need to bring this legislation to parliament and properly scrutinise and debate it. Whatever the final result of that is, at least it will have gone through due process and we will have looked after the interests of the public in this regard, not just the interests of financial planners and the large end of the financial services industry. We need to strike the right balance. The clear and obvious signal from groups in Parliament House today is that that balance has not been struck. It is our job to do that here in the Senate.