Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank all senators who contributed to this debate. And I would like to thank those crossbenchers who have indicated to the government their support for this Treasury Laws Amendment (Putting Consumers First—Establishment of the Australian Financial Complaints Authority) Bill 2017. This bill amends the Corporations Act 2001 and other related legislation to overhaul the financial system dispute resolution framework by establishing a new one-stop-shop dispute resolution body, the Australian Financial Complaints Authority, to ensure that consumers and small businesses have access to a free, fast and binding dispute resolution process.

This bill forms part of the government's broader commitment to ensure that where consumers or small business, in particular, have legitimate grievances about the way they were treated by banks or other financial services providers, there is an avenue for efficient but also binding dispute resolution without having to go through the court system.

I would like to just pick up on Senator Bernardi contribution's, where he indicated that we should do nothing in relation to this, in relation to improving the dispute resolution processes for consumers and small business until such time as the royal commission has reported. That goes to the heart of one of our core reservations about a royal commission into the banks and the financial system more generally. We were concerned that this is precisely what would happen, that people would use it as an excuse to do nothing, until such time as the report has been received. The government's view is that we need to continue to act, we need to continue to address issues, we need to continue to take real action. This piece of legislation is a core part of our package of taking action to ensure that consumers and small business, in particular, can have the most appropriate access possible to efficient and binding dispute resolution processes.

Let me make a few other remarks. In addition to the requirements that will be placed on the Australian Financial Complaints Authority via this legislation, the Minister for Revenue and Financial Services will have regard to the AFCA's proposed terms of reference in making an authorisation decision, as stated in the government's commitment to One Nation. The Minister for Revenue and Financial Services will require that AFCA's terms of reference will provide that an adverse inference should generally be drawn from a financial services provider's failure to provide information that is material to the resolution of a dispute, except in exceptional and unusual circumstances. In addition to this, it is her intention that for disputes relating to loans, to primary production businesses, including agriculture, forestry and fishery businesses, she will require the compensation cap of up to $2 million for all disputes about a small-business credit facility of up to $5 million.

I also note the support of both One Nation and Senator Anning for the government's amendments to require a review of AFCA after 18 months. And, again, just responding to some of the issues raised by Senator Bernardi in his contribution, that is just good practice, after a new initiative has been in place for a period, to conduct a review to assess whether it has delivered based on what was intended and, if not, what additional evolutionary improvements can be made to the arrangements that are in place. With those few words, I commend this bill to the Senate.

Question agreed to.

Bill read a second time.