Senate debates

Tuesday, 24 November 2015


Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014; Second Reading

12:31 pm

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

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.

12:36 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

I rise to speak on the Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014. What a difference a day makes. In the Senate yesterday Senator Wong put on an academy-award-winning performance about the Greens doing a deal with the government over a water register and an agricultural land register. The Greens have played a very important role in this debate in this country in recent times. I was part of the Senate inquiry into the FoFA changes and played an active role in the allowance motions. But today we have been given 40 minutes notice to look at the detail of what is a very complex subject. We have been given 40 minutes notice to look at a number of changes to the bill. We have seen a number of measures in the bill removed. We have seen amendments to the bill—some minor but some very technical. We have seen a set of legislation that is a totally different from what we have been debating in this parliament in recent months. So Labor are happy to come in here and lambast the Greens and the government for doing a deal, but today they are doing exactly the same thing.

It is disappointing that we were not given more of a heads-up so that we could at least have a closer look at this detail. I do not have anything to speak on because I have not had a chance to look at it—and nor have Senator Xenophon or Senator Madigan; they both had to drop off the speakers list because they have had no time to prepare for this. It is really quite pathetic, considering how important this legislation is. But let me say that Labor have done a lot of work on FoFA in the last three or four years. It is their law and the measures we are debating here today have been put into parliament by the Labor Party over a long period of time. They rightly should play an active role in this legislation and any changes go forward. I recognise that and I want to get that on the record. But it is disrespectful to the rest of us in the Senate that we have had no time to look at this. We have had no time to consider it. We have had no time to get legal advice on it. We have had no time to speak to stakeholders about it. In my opinion, this is a very direct attempt to cut us out of the debate. On that basis, the Greens do want to participate and we will ask some questions in the committee stage so that we can get some answers on this.

These laws are critically important. We have seen a number of scandals in financial advice in this country in recent years. A lot of things have come to the surface and there has been a lot of murky water. The legislation that we are dealing with today is absolutely crucial to restoring the 'advice' back into the financial advice industry and getting more Australians to seek financial advice. I think that is a good thing. The more Australians educated around the potential risks and opportunities in financial advice the better. We want to see a financial advice industry that transitions to being a lot more professional and accredited with higher standards. And I think that is what the industry wants. This legislation is critically important to restoring faith and confidence in the financial advice industry and helping the industry to prosper and boom.

I have worked with the FoFA committee stage. I have worked with a number of financial planners in my home state of Tasmania. This is something I have taken very seriously. I am really disappointed that we have had 40 minutes notice on what is before us today and we have not had a chance to consider it. The Senate is a house for reviewing legislation, but that is not going to be possible today because we have not had a heads-up.

12:41 pm

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

I thank those senators who have contributed to this debate. I would also like to acknowledge and thank Dr Chalmers, Mr Bowen and Mr Ripoll for working with the government to help facilitate bipartisan support for the government amendments to this bill that will be moved shortly. This bill seeks to deal with a number of minor and uncontentious technical refinements to the FoFA regulatory regime, which is designed to ensure that we minimise the level of the compliance burden without reducing the important and necessary consumer protections in place in the context of the financial advice industry. I commend the bill to the Senate.

Question agreed to.

Bill read a second time.