Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I would like to make a contribution to the motion to take note of the answer of Senator Cormann to Senator Dastyari's question. Firstly, I want to address the issue that Senator Macdonald just raised about what Labor was doing when a number of these extremely stressful and trying circumstances arose. We asked for the best interest duty to be contained in legislation. We asked that financial advisers opt in and get their clients to opt in to receive ongoing service every two years. We asked financial advisers to annually disclose statements—that is, send to their clients the fees that they are charging and the details of the services performed. A ban was placed on conflicted remuneration. That is what we were doing: we were taking note of the things that had happened to the innocent people in the community who had been taken advantage of by these unscrupulous providers.

It is more pertinent to ask: what were the Liberals and the coalition doing? On 20 December 2013, former Assistant Treasurer Arthur Sinodinos announced that the Abbott government would make several changes to FoFA, including: removing the catch-all provisions in best interest, which adds a loophole for advisers, meaning that best interest will become ineffective; scrapping the opt in, which allows an adviser to continue to charge fees, sometimes without having actively worked on a client's file, indefinitely, without receiving consent from their client; amending annual disclosure provisions so that advisers now only have to provide annual disclosure to clients who commenced with them after 1 July 2013; and a partial lifting of the ban on conflicted remuneration. This ban will only apply to personal advice, not general advice. This will open the door for a sales push culture of products over advice.

Let us just think about a couple of facts. Former Assistant Treasurer Senator Arthur Sinodinos was a director of the National Australia Bank. That is a fact. Former Assistant Treasurer Arthur Sinodinos is not in the chamber today—that is a fact. If you read any of the New South Wales newspapers in the intervening period, you will realise that he has been before ICAC. He was a former treasurer of the Liberal Party, a director of the company which was investigated in New South Wales. These are all facts. You can draw your own conclusions from all of these things.

But the reality here is that there is $1.8 trillion in superannuation in Australia. If you have a quick squiz at the ASIC site, you will see what Senator Cormann is trying to save investors from. He says, 'Financial advice is very expensive.' According to the ASIC website, you will pay between $200 and $700 for simple advice. For more complex or comprehensive advice, you will pay between $2,000 and $4,000. There are a whole range of things listed there that you should discuss with your financial adviser. But what has actually happened with financial advice is that it has been wholesaled by the big banks. Smaller financial advisers are being grouped together and are being swallowed up by the wholesale big banks.

If you go to the recent Senate inquiry conducted by Senator Mark Bishop, you will find that there were no less than 61 recommendations that found that there was a need for an examination of the Commonwealth Bank in relation to the misconduct of its advisers and planners. You have a picture here of a person—a former Assistant Treasurer, a former director of the NAB, a person who is not here in the chamber today to defend himself—I hope he turns up tomorrow to do so—who was the architect of this legislation which is opening up the gates and which is not the right thing for superannuants or anyone seeking financial advise in Australia.