Tuesday, 24 November 2015
Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014; Second Reading
The Labor Party will be supporting the passage of the Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014 through this place. I want to provide a bit of context and background as to how we have come to where we are on this.
In this bill we are looking at a series of well-negotiated, bipartisan suggestions and proposals on how implementation of the FoFA reforms of previous years can be improved in a practical, sensible and reasonable manner. I want to acknowledge the work that the Hon. Kelly O'Dwyer, the Minister for Small Business and Assistant Treasurer, has done in bringing these together in conjunction with Dr Jim Chalmers, the shadow minister from the Labor Party looking after financial services. Together they have been able to craft what is really a bipartisan series of proposals and changes that really clean up some of the more practical components of how this legislation is and has been implemented.
Mr President, as I am sure you no doubt recall, the provision of financial advice and the law surrounding that has been a very contentious issue over recent years. It has been before this chamber several times and, I am sure you recall, there was a very large debate regarding the disallowance of a series of regulations that were implemented by the last government. In the past year, we have had a series of different government ministers responsible for this area. In particular, when we were having that debate, it was Senator Sinodinos and then Senator Cormann. I note that since that time the Hon. Josh Frydenberg has also had that role, and now it is the Hon. Kelly O'Dwyer.
The industry has been crying out for certainty and it has been crying out to make sure there is one fixed set of rules. Different people in this chamber at different times have had some very different views on what these laws should be, how these laws should be implemented and what the standard for the provision of financial advice should be—particularly the role that the FoFA reforms implemented by the Labor government performed. Following the end of that debate last year, I think there was an acknowledgement from the government—rightly so, I believe—that the biggest mistake we can make now is having a long debate that provides uncertainty to the industry about what the standard is and what the requirements are going to be.
The government, at that point, turned around and said, 'As far as we're concerned, we had a different view than this parliament and certainly a different view than the Senate chamber.' They were looking to make some reforms that were not supported and were disallowed. That being said, there are still some minor reforms that can and should happen to provide practical certainty to the industry, also acknowledging that with any large piece of legislation like FoFA there are going to be implementation challenges.
I have to say the government has been true to its word. I know that, while ideologically there are certain members of the government that have come to the financial advice debate with different views, broadly they accepted that the debate had been settled and this legislation represents a consensus view that, while we may disagree on some of the bigger issues around financial advice, we can work together at a practical level to fix some of the minor challenges and make sure there is a level of certainty there for the industry.
I acknowledge the work that the PJC also has been doing in this space in relation to the provision of financial advice. The committee that I have been involved with, the Senate economics committees—both references and legislation—have also played a fairly sizeable role at different points in this debate.
There are still some challenges within the industry. I note that the PJC is looking at the education standards and has done some amazing work in setting them and working with industry to do that. I note that the Senate Economics References Committee is still going through a process, through the scrutiny of financial advice inquiry, where we are looking at whether or not there should be some kind of a scheme of last resort. They are good debates to have. There is a difference of views in this chamber, and that is all healthy; but what we do not want is to be going right back to the drawing board again for the provision of financial advice.
These are practical, simple, sensible changes to the existing legislation to provide certainty to the industry. That is why the Labor Party will be supporting the bill.