Sam Dastyari (NSW, Australian Labor Party) Share this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance (Senator Cormann) and the Assistant Minister for Social Services (Senator Fifield) to questions without notice asked by Senators Dastyari and Ketter today relating to the regulation of financial advice services and to budget measures in the Social Services portfolio.

Senator Cormann failed to give an adequate response about the dramatic actions that are being taken by this government in terms of watering down the Future of Financial Advice laws. What is so alarming is that, even though the government have got their way on their regulations, they are taking steps to ram through a legislative agenda to enforce and enshrine what is nothing more than a gift to a handful of crooks, con men and criminals who have misused the financial advice industry to promote themselves and their own objectives. Let us be clear: there are a lot of good people out there in the financial advice industry but there are also a handful of people who have given this sector and this industry a bad name. That is why when it comes to regulation, when it comes to protections, the onus should be on making sure consumers are being protected.

Minister Cormann said he is aware of comments by David Murray, the author of the government's financial services inquiry interim report, that the principle of consumers being able to access advice that meets their financial needs is undermined by the existence of conflicted remuneration structures in financial advice. But he refuses to say or explain why a sales bonus that is constructed as a reward for getting someone an increased number of sales is not conflicted remuneration.

The response here is, frankly, not good enough. We know that the financial services inquiry is underway and that, in November, it will hand down a report. We know that the report it will hand down will be scathing on the financial advice industry. Our argument here is, rather than bringing in the legislation this week or next week or as soon as possible, considering the minister has already got his way on his regulations, why not wait to allow a proper investigation, a proper FSI report to follow and a lot of these matters that are now being aired, matters involving the Commonwealth Bank, Westpac, and the ANZ when it comes to Timbercorp, to be properly debated, explored and investigated by the FS inquiry and then, at the end of that process, if there is a need for legislation then have the debate then. But we do not need to ram through this legislation.

Last week, in The Sydney Morning Herald, the fantastic Adele Ferguson wrote that a report is coming down a week or so from now regarding the conflicted nature of advice that is being given in the insurance sector. What is the government's plan? What is its response? Get through our FoFA changes as soon as possible; ram the legislation through as quickly as possible. We were told in the committee that we could not wait another week, that it all had to be brought forward this week and that we have to table the report this afternoon. But there is no rush for this. There is no need to ram this legislation through. Let us see what ASIC has to say next week and what the FSI has to say. Let us find out what is happening in Westpac. Let us make sure we have got right to the bottom of what has happened in the Commonwealth Bank. Let us allow for a proper investigation into the role of ANZ, as far as their responsibilities for Timbercorp are concerned, and let us allow all these matters to be properly aired, debated and investigated. Then we can have a proper, frank and fearless debate about what legislation is needed. But simply enforcing the regulations that the minister has already got up through legislation, to get it off the agenda, is not good enough. It is rushed, it is ill-prepared and it involves a series of recommendations and amendments that will, frankly, not protect consumer protections. We can wait and we should wait.