Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Hansard source

I indicate that we are not inclined to support these amendments. We believe that the amendments that we have put forward on sheet 8284 would be the appropriate way to deal with this. The amendments on sheet 8284 would maintain the Superannuation Complaints Tribunal in its current form, separate from the proposed AFCA ombudsman body. In October last year, under pressure to call a banking royal commission, the Prime Minister promised to establish a new tribunal to deal with financial service complaints and disputes, but this bill does not create a tribunal. We know that the AFCA is not a tribunal like the Prime Minister promised. It's not even a government authority at all. The word 'authority' in AFCA's name is a misnomer. AFCA is just another ombudsman scheme, in the form of a private company, limited by guarantee. It's another FOS and another CIO. Instead of creating a tribunal, this legislation actually abolishes a tribunal already in place.

Our amendments would protect the tribunal—that is, the Superannuation Complaints Tribunal—that has been there for decades. It's a tribunal that operates effectively when it's properly funded. The government, in our view, hasn't made a case to replace a specialist statutory body with the new AFCA. There are three existing financial sector external dispute resolution bodies. The government is replacing the first two bodies—the Financial Ombudsman Service and the Credit and Investments Ombudsman—with another private company, a limited-by-guarantee ombudsman service. AFCA is a merger and a rebranding. ASIC has confirmed that, aside from potential increases in the value of disputes that can be heard, the new AFCA will not have any new powers to resolve consumer disputes that the first two bodies do not already have. In abolishing the Superannuation Complaints Tribunal, the bill is much more than a rebranding exercise. Labor believes this will weaken protections and outcomes for consumers.

The design of the SCT recognises that superannuation is not just a regular financial service based on a contractual relationship. The design of the SCT recognises that superannuation trustees are custodians of the retirement savings of millions of Australians. They have obligations to all members, unlike the other two bodies. This bill seeks to replace AFCA. The Superannuation Complaints Tribunal was established as a government statutory tribunal with special powers and expertise to deal with superannuation disputes. The reasons that we seek our amendments are as follows—and I know that's not what's before the chair at the moment, but I just want to explain where we are.

Firstly, the Superannuation Complaints Tribunal should remain an independent statutory body. It was established in 1993 and has been effective in resolving disputes within super. Super is not just about another financial product and should not be seen as such. The only real criticism that has been made of the Superannuation Complaints Tribunal is its delays in resolving some disputes. But it is clear that this is the result of a lack of funding and staff cuts, including a 30 per cent reduction in staff under this government. There is nothing significantly wrong with the Superannuation Complaints Tribunal that a suitable funding model wouldn't fix. The SCT has the technical expertise needed for complicated super disputes, as do the adjudicators. This is at risk of being diminished over time with a broad complaints body. The SCT has just under 2,500 complaints in 2016, compared to FOS which has 34,095 complaints. There is a real risk of the superannuation industry cross-subsidising dispute resolution for other parts of the financial services sector, which will affect the hard-earned savings of Australians. The need for a special, standalone superannuation complaints tribunal will become even more important as funds within the superannuation sector continue to grow over time. Submissions to the Senate inquiry and hearings made clear that, despite government's attempts to copy and paste Superannuation Complaints Tribunal powers into the new AFCA body, there are a number of important protections and powers that are missing. Despite potential last-minute government amendments, some of these issues remain outstanding—and we've just received further amendments this morning.

A number of groups, including the Law Council of Australia's Superannuation Committee, the Association of Superannuation Funds of Australia, the Australian Institute of Superannuation Trustees, Industry Super Australia, the Australian Council of Trade Unions, and Chartered Accountants Australia and New Zealand either oppose the abolition of the SCT or have raised concerns about protections that are not included in the new bill or process. Even the SCT chairperson, Helen Davis, told the committee:

I don't think it would be true to say, in relation to super, that it's a rebranding exercise. Arguably, it's quite a significant change for superannuation, specifically in terms of the external dispute resolution. It goes from a statutory body to a non-statutory body. It moved from a specialist body to a one-stop-shop body.

I ask the minister: does the minister agree that this is not a statutory authority?