Senate debates

Thursday, 25 September 2014

Questions without Notice: Take Note of Answers

Answers to Questions

3:17 pm

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

Today I know there have been a lot of other events that seem to be taking people's attention at the moment, but I just want to draw people back to the response that was given by Senator Cormann to a question that I asked him regarding the Future of Financial Advice laws. What essentially has happened is that this is now a government that on a key part of policy, about how we deal with financial advice in this country, has been left stranded. Not only have the Council on the Ageing, Choice, victims' groups and National Seniors all in previous weeks and months come out to oppose the proposals and say frankly that what is being proposed by the government is not good enough and will take us backwards; you now, in recent weeks, have a situation where all four major banks and the Financial Services Council itself, who were previously the largest supporters of the government in this space and on this policy, have come out and said that they believe the approach by this government has failed and that we need to have some form of regulation.

I just want to draw everyone's attention to the words of Senator Cormann about the CEO of the Financial Services Council. He said that their actions are 'an absolute cop-out' and were 'putting up the white flag'. I never thought that I would be the person standing in this chamber defending the former leader of the New South Wales Liberal Party John Brogden, but I believe that the proposal he has put forward is one worthy of real consideration. I believe it is a step in the right direction. There has to be a higher level of standards and we have to look at how we regulate for that level of standards. Perhaps their ideas or other ideas are the right ideas.

But there is a real policy difference that is emerging here. Senator Cormann outlined the fact that there is a consensus that there needs to be a higher level of standards. I could not agree more. The difference that is emerging is how you actually create the higher level of standards. We on this side of the chamber believe you do that by making sure there are rules and regulations in place to protect people—consumers and those seeking financial advice—from exploitation. I reject the proposal put forward by Senator Cormann in his legislation that has been foreshadowed and certainly in the regulations that have been put forward and that we were, unfortunately, unable to disallow during that period, because this approach that saying, 'We'll let the market run free on this and remove regulations'—or what they see as regulations but we have argued are protections—will somehow increase the standard in an industry is simply not the case.

The financial services industry has been riddled with con men, crooks and criminals who have, unfortunately, given the industry as a whole a bad name. I do not want to besmirch all financial planners out there. I think there are a lot of incredibly good, hardworking financial planners who are trying to do the right thing. But there are a small group that are really damaging the reputation of this industry. What John Brogden and others at the Financial Services Council are now saying is that, to tackle this issue, there has to be some form of regulation and some kind of body. But I think what is more important is that now you have a position that is still being held by this government but that even the Financial Services Council itself, the peak body responsible for the finance industry, does not support. So not only is the minister not able to point to a single consumer or advocate group who actually supports their position when it comes to financial planning; you now have a situation where the industry itself is saying something needs to happen here. We have seen AMP in the last week, and we saw CommBank come out after some of the scandals regarding Commonwealth Financial Planning. We have seen the NAB, Westpac, ANZ and others, all major institutions, come out and say there has to be a better and higher level of standard, and the Financial Services Council has come out as well. This idea that they are putting up the white flag just demonstrates the approach this government has, as if it is only about the fight and the battle. It should not be. It should be about protecting the consumers.


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