Sam Dastyari (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance (Senator Cormann) to questions without notice asked by Senators Dastyari and Bishop today relating to the regulation of financial services.

On the eve of the Western Australian by-election, the government is scrambling to find public support for Future of Financial Advice reforms that clearly favour the interests of one powerful sector over the interests of consumers. We have witnessed the government scrambling to find public support for its proposal to repeal sections of the Future of Financial Advice reforms. On the eve of the Western Australian by-election, there has been a long, loud chorus by consumer and community groups criticising the government's proposed changes. On the eve of the Western Australian by-election, this week Senator Cormann penned a long defence of the FoFA repeals in the Australian Financial Review, only to scramble backwards, in retreat, a few hours later. Senator Cormann is retreating in the face of overwhelming public concern. It has been astonishing to watch this process unfold.

It started with Senator Sinodinos's sheepish announcement of the repeals just before Christmas. There were his nervous attempts to defend his position in this chamber. His constant repetition of 'implementation and compliance costs' failed to win the support of consumers, customers and, more worryingly, the market regulator. In fact, the regulator was forced into making a very nervous admission of its own, which is that it was facing the prospect of the repeal of the very same consumer protections it had argued for.

The government's proposal to repeal these important aspects of FoFA have now descended into a huge embarrassment for the Abbott government. The Prime Minister needs to take responsibility for the astonishing manner in which this has been handled. We heard today from a senator from Western Australia, Senator Cormann, appealing to those saving for their retirement. We in the Labor Party are only too well aware of the challenges of saving for retirement. My office has been inundated with phone calls, emails, faxes and letters from people who lost a large proportion of their retirement savings to trailing fees and commissions before Labor introduced its extensive package of FoFA reforms. Through you, Mr Deputy President, I want to ensure that this is clear to Senator Cormann: these people have lost a large proportion of their principal sum—not just the profit, the interest or any annual return. They have lost a large proportion of the money which they started with and invested in good faith. Their retirement savings have been diminished by the advice of people claiming to be acting in their best interests.

I have heard Senator Cormann talking about giving consumers a choice and the benefit of robust competition. I invite the senator from Western Australia to talk to the consumers who have contacted my office to voice their concerns. Many of them were on the verge of retirement. These are the very people Senator Cormann was appealing to during question time today—people in their 50s and 60s who have also been astonished to discover that their own parents, who are in their 80s and 90s, have been fleeced by the trailing fees and commissions that were apparently in their best interests.

That is right: before Labor introduced the FoFA reforms, retirees in their twilight years were conned into paying commissions and trailing fees that were plainly not in the best interests of these consumers. It is not enough for the government to pause the process until after the Western Australian Senate election. Western Australians know only too well, as do all Australians, what happens when advice is not provided in the best interests of consumers. The actions of the government have not been good enough. (Time expired)

Question agreed to.