Thursday, 25 February 2021
Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020; Second Reading
I rise to speak on the Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020 on behalf of the opposition. This bill implements three provisions of the government's response to the banking royal commission. It is worth noting that the Treasurer had promised to deliver all of the provisions included in this bill last year and we're still waiting for action on many other recommendations. Labor acknowledges that there may have been other worthy calls on the Treasury's time in the past six months, given the pandemic, but we also observe that this is a government that has taken a go-slow approach to almost every consumer-friendly reform. It is a government that has dragged its feet on every measure that would keep the banking sector accountable. COVID-19 appears to have been a very convenient excuse for the Treasurer to drag his feet on delivering on recommendations of the banking royal commission, and, unfortunately, this is consistent with a longstanding pattern of inaction. This is the government that voted 26 times against establishing a banking royal commission. It is a government that continues to play down any of the problems or risks for consumers in this sector.
The provisions of this bill are worthy changes to financial services law. Labor will support them. It is consistent with our commitment to implementing the recommendations of the royal commission properly. Schedule 1 provides for some enhancements to the framework governing the provision of financial advice to clients and ongoing fee arrangements in line with recommendation 2.1 of the Hayne royal commission. Schedule 2 sets out a new disclosure requirement for financial advisers. It ensures that any adviser who is not independent must provide written advice to their clients specifying how and why they are not independent and where their interests may conflict with those of their client. Schedule 3 sets out new requirements for advice fees being charged in superannuation, prohibiting ongoing fees being charged for most super accounts and preventing advice fees from being charged without express consent from the member.
Many of the people here will remember too well the cases exposed through the banking royal commission that led to the changes before us today. In perhaps the most notable of those, it became very clear that AMP knew that, in charging fees to clients for extended periods of time for services they knew they could not deliver and were not in a position to provide, their behaviour was both unethical and illegal. These were issues that were raised by junior staff within that institution and drawn to the attention of senior staff, and senior staff proceeded anyway—they did it anyway. It's for that reason that we're here today. The unethical and systematic exploitation of customers by financial service providers who charged hundreds of thousands of dollars in fees for services that were never provided absolutely undermined trust in our financial system, and it has undermined trust more generally at a time when our society needs trust more than ever. I hope these new laws do combat the sort of misconduct that led to Commissioner Hayne's findings. It is going to take more than this bill to rebuild trust in our financial system. It will require financial professionals themselves and financial services entities to commit to cleaning up their own industry and ensuring that customers really do come first. It will require a government and a Treasurer that are firmly committed to improving our financial system. Sadly, I think we lack this latter element.
The Liberal Party have never been fond of a financial system that serves Australia. They have always been first and foremost in favour of a financial system which serves the best interests of their mates in high-paying jobs in senior roles in banks. That is behind the 26 occasions when they voted against establishing the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. This is a group of people and a government that have never had a vision for financial services beyond what their mates tell them over a very long lunch.
You need only look at the other bill that was put forward by this government at the end of last year, which would have stripped responsible lending obligations from almost all consumer credit contracts. It goes directly against the first recommendation of the royal commission, which explicitly told the government not to fiddle with those obligations. Those obligations were put in place by Labor in 2009 to ensure that banks and lenders were obliged to make sure that credit products were not unsuitable for their customers, and that was to prevent the kind of behaviour that we saw in the global financial crisis. This is nothing less than a big free kick for the big banks, stripping away necessary protective legislation just to save a few bucks on paperwork.
The Morrison government did not ensure that the banking royal commission recommendations were implemented in full before the COVID crisis. They dragged their heels on that. But the Australian public rightly expect that the banking royal commission's recommendations will be implemented, not glossed over, not twisted, but actually implemented as intended.
As I mentioned at the beginning of my speech, the Treasurer has blamed the pandemic for his go-slow on bringing forward legislation for implementation. It's an excuse that is very convenient. The reality is that the COVID-19 pandemic has impacted on real people living and working in the real economy. They have lost their jobs, found themselves dependent on government assistance for the very first time in their lives and endured great uncertainty. The last thing that people need at a time like this, at a time of great uncertainty, is to be exposed to financial misconduct as well. The evidence presented to the banking royal commission demonstrated in volumes the devastating impact of financial misconduct on people who have done nothing wrong—people whose trust has been abused by individuals and institutions who too often got away with unscrupulous, unethical and illegal practice. The government cannot continually delay and distort important and essential reforms. I commend the bill to the Senate.
The Greens welcome this bill, which will implement four recommendations of the banking royal commission—specifically, recommendations dealing with the ongoing disclosure of, and consent to, fees by customers and the disclosure of any lack of independence on the part of a financial adviser.
This bill, the Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020, is one part of the end result of the royal commission into banks that the Greens fought for so hard for so many years. This is the royal commission that the government had to be dragged kicking and screaming to conduct, despite the fact that tens of thousands of Australians have had their businesses and their lives destroyed by the rapacious and profit-hungry conduct of the big corporate banking sector in this country.
As Senator McAllister said, the government voted against a banking royal commission 26 times. It's probably worth pointing out here that Labor voted against it on multiple occasions as well. In fact, it was only the prospect of an insurrection amongst government backbench senators that forced the government's hand. They've shown just how much their heart isn't in it by using the cover of COVID to introduce legislation that would abolish responsible lending laws, in direct contradiction to the very first recommendation of the royal commission, recommendation 1.1.
As I said, it also took the Labor Party a while to see the light, no doubt slowed up by the fact that one of their number, Ms Anna Bligh, heads up no less than the Australian Banking Association. In fact, in voting against a motion from Senator Whish-Wilson, former Senator Dastyari described Senator Whish-Wilson's motion as 'a stunt'. Well, it wasn't a stunt; it was a concerted campaign to shine a light on the misdeeds of those given the privilege of managing other people's money. If there's anyone who should be thanked for the banking royal commission, it is Senator Whish-Wilson, and he should be thanked not only for the royal commission but for this bill and other bills which implement the recommendations of that royal commission. It was Senator Whish-Wilson who in the Senate, in committees and in estimates consistently pursued the banks for their misconduct and the regulators for their complicity.
But, as welcome as the royal commission was and as welcome as the changes included in this bill are, they only scratch the surface of a fundamentally broken system. After decades of privatisation and deregulation giving everyone the freedom to be actors in markets to improve their lives, inequality has grown, employment is less secure, the provision of essential services has been eroded and the planet is cooking, and we are in the sixth mass extinction event in the geological history of the earth. Neoliberalism and trickle-down economics are both massive cons, and they have broken the Australian economy and destroyed the Australian dream of owning one's own home.
Homeownership rates today have fallen back to where they were in the 1950s. I'll say that again, colleagues. Homeownership rates today are back to where they were in the 1950s. Along with a reduction in the provision of public housing, this means more and more people are in private rental, and more and more people are in rental stress. They are paying through the nose for their rents because house prices have been inflated by tax incentives for investors and deregulated bank lending—which, by the way, the government wants to further deregulate by abolishing responsible lending obligations. Since the pandemic, bucketloads of printed money have been funnelled into the financial system by the Reserve Bank of Australia. Perversely, these high rents then prevent renters from being able to save up for their own homes. Colleagues, turning homes into an asset class, which is exactly what neoliberalism has done, has destroyed the lives of countless Australian families and is in the process of pricing most of an entire generation of young people out of the housing market in this country. And around and around it goes. As I said, this hits young people the hardest, and there is also another group of people, which is older people who have been the subject of family breakups, who find themselves stuck in the rental market and in extreme rental stress.
Part of the problem here is that Australia's house prices are among the highest in the world and our level of household debt is among the highest in the world. Conversely, even after the pandemic, Australia's level of government debt is one of the lowest in the developed world, thanks to the success of the deficit hawks in discrediting the value of government spending. As a result, we've underinvested in public infrastructure and public services and we continue to underinvest in public infrastructure and public services.
At the same time that public infrastructure and services are being neglected and people are being left to fend for themselves, workers are getting paid less. Wages growth is flat lining. The share of total national income going to workers has declined over the last two decades, and it hit the lowest rate on record recently during the pandemic. In recent years, wages growth has also been at its lowest rate since World War II, and wages have stopped growing in line with productivity growth. On the other hand, the share of income being directed to company profits is at its highest rate since World War II and was so even before the start of the pandemic. Let's revisit that. Wages growth is at its lowest rate since World War II, and the share of income being directed to company profits is at its highest rate since World War II. So the rich get richer and the poor get poorer.
Not surprisingly, wealth inequality has gone through the roof, because profits are up, benefiting people who are already wealthy enough to own shares, and because home ownership rates have declined, meaning that inflated land prices are benefiting fewer and fewer people. Wealth inequality has also increased because privatisation has concentrated the ownership of more wealth in the hands of the already wealthy. And what are the wealthy doing with all this wealth? Well, the rate of business investment has been slowing and has actually declined. This is despite record low interest rates even before the pandemic hit. Accordingly, productivity growth is also stagnant. Before the pandemic, even with the cheapest money in history, businesses were investing less and giving less to workers in wages and instead giving more to shareholders, including business executives. It has only got worse since COVID hit. So, no, the wealth is not trickling down. It's not trickling down to wages and it's not trickling down to investment and it is most certainly not trickling down to those who, because of policy choices made by this government, can't find any work or can't find enough work to make ends meet.
We are selling out far too many Australians, and particularly we are selling out far too many young Australians. Those young Australians are not just going to inherit a cooked economy; they're going to inherit a cooked planet. We need to do much, much more. The neoliberal agenda is destroying nature. It is driving species to extinction. It is cooking the planet. It is making the already obscenely wealthy even better off. It is skyrocketing wealth inequality. It is pricing young people out of the housing market. It serves nobody except those who are already wealthy and the big corporations in this country. That's why we need to make sure that the superwealthy and the big corporates pay their fair share of tax, so we can fund the essential services that people want governments to deliver—better hospital systems, better schools, better public transport systems, better support for people living with disabilities. We have the wherewithal to do those things and deliver those public services at a far higher quality than we are now and make them available to far more people than we make them available to now. We can fund it by taxing the superwealthy and the big corporates. Make them pay their fair share of tax. The superwealthy and the big corporates have been making off like bandits, trousering obscene levels of wealth, while far too many people miss out, the planet continues to cook and the war on nature continues, as it has, tragically, for so many decades.
Colleagues, the system is broken. The ecosphere that provides for all life on this planet is groaning under the strain. As a result, our social contract is beginning to fracture. This will lead to more and more people joining the ever-growing movement for real climate action to protect nature, to oppose privatisation and deregulation, to make sure that the big corporates and the superwealthy pay their fair share of tax so we can fund the public services that Australians expect and demand their governments provide. This bill is a step forward, based on the recommendations of the Hayne royal commission into banks. That royal commission exposed criminal behaviour. It exposed a toxic culture, based on greed and obsession with profit. The banks need to be hauled into line, but this government is starting to waiver.
Recommendation 1.1 of the Hayne royal commission, not to change responsible lending laws, has been screwed up and thrown in the bin by this government. While we support this legislation, we want to make sure that people understand this government is starting to go weak at the knees in terms of bringing the big banking corporations to heel. The Greens will fight them every step of the way, if they start to once again roll over and let their big corporate donors and their big corporate masters tickle their collective bellies. We're watching you. We don't trust you and we will hold you to account.
I rise to address the Senate on the Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020. I start this contribution by reflecting upon where this fits into the Liberal tradition and the Liberal philosophy in Australia. We have always taken the view that we will pursue law reform, whether it be to address wrongdoing in capital or wrongdoing in a trade union. That has been our tradition. There is no doubt that it took too long to have this royal commission. Once it was up and running, it did show that there was enormous malfeasance going on in the financial sector. It is to the credit of people who pushed for that particular commission that we now have significant reforms already enacted by this parliament with more to come today.
We've already delivered quite a large number of the recommendations. By the time this bill is passed, 70 per cent of the recommended changes will be the law of Australia. The Hayne commission was a broad based review, so there are many component parts. A couple of them, which have already been enacted and which I think are quite important, include: putting your best-interest duty in for mortgage brokers; ending the gravy train of conflicted remuneration; ensuring that there is a requirement for compulsory membership for AFCA; stopping hawking; and also putting in place laws which end the trail of money between super trustees and their clients, which is known as the hostplus clause. There's been this enormous gravy train washing around in the financial adviser sector and the super sector, where all the snouts have been in the trough for far too long. These changes put an end to that. They must ensure that the financial sector is focused on the people that they serve: their clients, their customers and the workers. I think we have a particular duty to reflect upon the laws in this area very carefully as a parliament, because of the existence of this quite extraordinary experiment of compulsory superannuation, which takes away people's money and gives it to strangers to manage—usually poorly. We must make sure that the workers' money is well looked after and is not being pillaged by banks and unions.
This particular bill deals with financial advice, and its three main components are to put in place opt-in arrangements so that clients have to agree on an annual basis to fees. That is entirely reasonable. It has been the subject of much consternation over the years, but I think asking people to agree for ongoing fees makes a lot of sense. It also takes us into the territory of requiring a disclosure of independence. I would say that too few Australians access good-quality advice and I think that good-quality financial advice can actually help all Australians. But it is important that Australians can have confidence that the advice that they are receiving is in their interests and not in the interests of some other financial fizgig. That is what the disclosure requirements in this bill will require, so people will know whether or not their financial planner, their financial adviser, is conflicted in the advice that they provide. With this statement of independence, basically, a planner will no longer be able to hold themselves up as independent if they are not. This bill will define how that is to occur: the financial planner must provide the client with a statement of their independence as part of the financial services guide.
There is no doubt the financial services guides are already too long. But I think if we're going to add one more piece of paper then adding an assurance of independence is important. It is true that there has been great malfeasance in this sector, and that is to be greatly regretted. But it is a sector which is important to our economy and it's too important to let it go and allow it to go the dogs. So measures like these that are designed to bolster independence, credibility and standards are absolutely worthwhile, which is why the commissioner recommended them.
The third component of this bill puts in place arrangements in relation to MySuper accounts, which are the default super accounts, so that ongoing advice fees cannot be deducted from MySuper accounts. But the provisions will permit one-off or discretionary fees to be taken from MySuper accounts at the direction of the individual client. There can be no more of the ongoing gravy train with fees for no service that roll on for ever and ever. The only fees that will be permitted to be taken out of people's default superannuation accounts will be at their discretion and on an individual basis. That is what this bill will do. Those are effectively the three key changes which add to what is already a very good suite of reforms.
As I said, we have already delivered 70 per cent of the royal commission's recommendations, so when the Labor Party come into this chamber and say that we're dragging our feet, it's just not true. Seventy per cent within two years is a significant achievement, given the breadth and scale of this royal commission. It's also not true that we are avoiding Hayne's recommendation in relation to responsible lending. All these contributions from people who say that we're stripping away responsible lending are skin deep. Responsible lending is embedded in the prudential standards and laws of Australia and will be for all time. When an individual goes to seek a loan from a financial institution, whether it be an ADI bank or a non-ADI institution, that institution will have to assess their capacity to repay that loan. For low-income people, there will be additional protections. Unfortunately, other than to run these glib talking points, the Labor Party don't seem to be able to muster more than a skin-deep, superficial economic policy and financial policy. Responsible lending is embedded in the legal framework and the fabric of Australia and it will be after our responsible lending reforms pass this parliament.
Finally, these are all incremental changes. All of these changes from the royal commission will ultimately build confidence and improve standards in the financial sector. But it's just one set of reforms. The other reforms we need to continue pursuing include getting workers a better deal in their super, which is why structural changes were announced in the budget to further end the gravy train. This huge experiment of superannuation has sat there for 30 years, with its own book being run for its own interests, not considering the interests of the workers, on whose money it is being run.
I too rise to make a very short contribution on the Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020. I won't go into the detail of the bill; Senator Bragg has done that very well. I acknowledge the presence of Minister Hume, the Minister for Superannuation, Financial Services and the Digital Economy, in the chamber. I know that Minister Hume, with the other portfolio ministers in this space, has consulted extensively on the bill.
I do have a few philosophical reflections on the way this parliament and the executive need to deal with royal commissions. I think we have to be very careful—and I'll use a phrase that's been used in other contexts here—to recognise that a royal commission report is a report to the government, not of the government. Royal commissioners and royal commissions do not have a font of pure wisdom. They do not necessarily provide recommendations that always reflect the full breadth of knowledge and information that governments need to take into account. I say that as a word of caution to those opposite and those on the crossbench. People start thinking that what a royal commissioner recommends has to be implemented 100 per cent and that that is what this parliament's job is to do. I disagree with that. I think we need to look very carefully at royal commissioners' recommendations, but then we have to do what is in the best interests of Australia. I say that in the context of an environment where I want as many Australians as possible to be able to access high-quality financial advice. I fear that the suite of changes that has been made over the past decade has created an environment where the cost of advice will increase and some Australians will not be able to afford high-quality financial advice and so will be forced into more set-and-forget products, like superannuation. I think that is a concern moving forward. As these measures are implemented, I think we do need to send a very strong message to the regulators particularly that we need to always remember that the goal here is to ensure that the financial advice that is out there in the marketplace is of the highest quality but is also affordable and can be delivered in an affordable way so that as many Australians as possible can access that advice.
In an environment where you have best-interest obligations and where you have an end to trailing commissions, perhaps something we could look at in future is whether the yearly opt-in is the right time frame. To me, one year is not a magical number. Perhaps two years is a more regulatory-friendly period to look at in the future. As a chamber, as a parliament, I would like us to keep thinking about these things. We need to create an environment where we allow Australians—Australian families, Australian businesses—to access high-quality and affordable financial advice.
Thank you for the opportunity to rise today to speak on the overdue Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020. I want to point out to Australians who are listening, who would recall the Hayne royal commission, that this is a really important discussion that's happening here today. It affects people's lives in a real and material way. People remember the royal commission. It's starting to become a bit of a 'back then' memory: 'How long ago was that? Was it two years? Was it three years?' That's the kind of conversation that will be happening in workplaces. It's taken an awfully long time for any action. Despite the outrage that people felt when they found out what was going on in the banking sector, it's taken this government way too long to do things to protect the Australian people.
I've said in speeches this week that I am sick and tired of government senators coming in here and saying: 'We understand. We understand the challenges. We care about your financial future. We will look after you. We are the really good managers of money.' I'm sick and tired of them saying how much they care but seeing how little they're actually doing to bring that care into action to provide protections and improvements for the Australian people. That's what is becoming more and more apparent with this government, day in, day out. This legislation is two years late. It shows how reticent the government is to deal with misconduct in the financial sector.
This is, in fact, a government that voted against the banking royal commission—let's remember that—26 times. And this is a government that is now attacking the industry super sector. People will have seen on the television the ads for Industry SuperFunds with the two little hands going up and down. The government thought they were going to have a really good go at attacking Industry SuperFunds, but, when the Hayne royal commission got into it, they found out that the government was actually wrong and that Industry SuperFunds is doing a really good job of looking after workers' money. They didn't like what they found then, and they'll do everything they can to try and damage the sector that got the clean bill of health from the Hayne royal commission.
That battle will continue. Today we're talking about a particular matter that concerns financial investment in this country. We see ridiculous attacks coming from those opposite, including from Senator Bragg—who has some of the most outrageous ideas about the superannuation sector—representing the party now in this place. They said from the very beginning that superannuation couldn't possibly work, that it would never happen, that it would never be good, that every small business in Australia would go under. People need to remember the attitude this government had to superannuation from the very beginning. The reality is that, at this point of time, the government is forgetting the massive misconduct in other areas of the financial industry that needs to be addressed. It wasn't the industry super funds that were charging dead customers. It wasn't the industry super funds that were found to have breached anti-money-laundering and counterterrorism financing laws 23 million times. And it wasn't the chief of staff of an industry super fund that was found to have embezzled $23 million from members. It was banks and the retail sector that did all of that.
The government was dragged, kicking and screaming, into reform of the banking and financial sector, and now its wildcat backbenchers are trying to drag its attention to the wrong industry again. I think we should be very concerned by the comments that I just picked up from Senator Brockman in his very short contribution to this debate. He is trying to tell Australians that they shouldn't pay much attention to a royal commission report. So let's be clear. This Liberal-National government voted 26 times against having a royal commission. Then they were forced to have it because there was a revolt amongst the Nats—and again I reference Senator John 'Wacka' Williams for a lot of courage on that issue. They've tried to bury it for two years. Finally, they're now having to do a couple of things. And we've got Senator Brockman saying to the Australian people: 'Don't pay much attention to royal commissions. They don't tell you everything that's important.'
But that's not what they were saying when the royal commission delivered its report. On the days after the royal commission delivered its report, the government was saying, 'We agree with the recommendations.' Now, two years later, they're hoping that Australians have forgotten what happened in that royal commission. They're trying to convince Australians, in the contributions we've heard this morning here in this place, that they know better about what to do with your money. They know better—the ones who didn't want the Hayne royal commission. They want Australians to forget it. They want to forget the recommendations. They want Australians not to notice how slow this government is in acting.
But right now we've got a government that is doing something, dragged kicking and screaming into reform, and we have a bill addressing some of the recommendations. To be clear, the bill only addresses four of the remaining 44 financial sector royal commission recommendations—not too much. Since the report was released in February 2019, five recommendations have been abandoned altogether by the government. And now they're looking to weaken the responsible lending laws, which would leave thousands and thousands of Australians open to predation from people who would exploit them.
Despite the royal commission report explicitly saying responsible lending should not be changed, that is the path the government is heading down. Treasurer Frydenberg is ignoring the expert advice, the careful investigation, done by no less than a royal commissioner with all the resources at his disposal. Mr Frydenberg is saying: 'Trust me, my mates across Australia. I'm good friends with Scotty. I'm good friends with you. I'll look after you. Trust me. Just ignore the expert advice and don't pay attention to the fact that I'm going to give dodgy lenders carte blanche to rip off ordinary Australians and leave people wallowing in debt.'
I heard evidence in the committee hearing in Townsville on the government's new IR bill that the increasing casualisation of work is making it harder and harder for many workers to get ordinary lines of credit. Because their work is insecure, banks are saying, 'We won't help you.' It's into that climate that this government is introducing further risk. Australia has one of the highest rates of household debt in the world, and the Treasurer, Mr Frydenberg, would rather add to that mountain than help give Australians a wage rise. The government, in this legislation and so many pieces of legislation in this place, reveal to us who are watching closely that they really don't care about workers. After seven years in government, they've still got no plan to raise wages, despite industry and the Reserve Bank begging them to do so; seven years in government and their only idea to get Australia out of recession is to cut wages; and seven years of delay and distraction on financial sector reform.
I read in the AFR that the Treasurer will further erode confidence in investors by winding back the continuous disclosure regime. This regime is allegedly to protect directors from some imagined bogeyman of class actions against directors, but, in fact, it's further obfuscating the actions of companies from their shareholders. There are people in the financial market who are paying attention to this, who are seeing exactly what is going on with this government. The thing is, though—as I've said on many occasions in this place—that, when I was growing up in Curran Road, Blacktown, in a fibro house that my mum and dad were very proud to be able to call home, there wasn't a lot of talk about superannuation. That word didn't come across our dinner table. When I think about hardworking Australians who are out there doing whatever they can, stitching together insecure work to try and feed their families, they are so busy just keeping their heads above water that they require this government to act in their best interests. There's a degree of trust that has been given to this government that is being abused, because this government should be looking after those people who are out there doing the right thing—working and working hard, but, at every turn, every opportunity they get, the government build in risk for ordinary hardworking people and constantly drive legislation through this place that advantages those who have the most.
I just can't see how what the government are doing provides any assistance at all to ordinary mum-and-dad investors. How does helping the increasing number of retail investors in the stock market assist normal mums and dads? ASIC itself has said that 'the continuous disclosure regime is a fundamental tenet of Australia's market'. For people who don't understand what a continuous disclosure regime is—and a lot of the words in this place seem to be a long way from what normal people talk about—it's about telling people the truth about what you're doing with your big business that's listed on the stock exchange. That's it, pretty much, in a nutshell. This is what's going on. and you can see what's going on. And we know that, if you know what's going on, then you can make sound investment decisions. It's pretty simple, really, even though it's dressed up in those words. We should be strengthening this pillar of continuous disclosure; we shouldn't be bringing it down—yet that is what the government is attempting to do.
Desperate times do indeed call for desperate measures, but this decision cements temporary measures used in a global recession. The government just have it wedged in there and now they are advancing it for the long term, to the detriment of Australians, to the detriment of people investing in the stock exchange and to the detriment of great super funds seeking to invest for their members in the stock market. They are weakening the measures of this regulatory regime. They think people—
An honourable senator interjecting—
Actually, they are right, I suppose: they are relying on people being too busy to pay attention while they sneak this sort of dodgy stuff through this place. I watched gobsmacked last year as the Treasurer moved to kneecap litigation funders through rushed and cramped regulations that ASIC spent tens of thousands of dollars on. They had to get legal advice to try to figure out how to implement the Treasurer's hastily made announcement, which occurred only eight days after he had called on this chamber to undertake an investigation. Everything that you look at with this government smells. Dodgy deals are being done behind closed doors. There is so much corruption, so much of a lack of transparency. Like there's some special club—I won't even call it a boys' club because the girls on the other side are in on it as well—we who have money, we who have a high education, we who live in suburbs that separate us from the riffraff of Australia, we will own this agenda, we will manage it and we will just talk to those people at the top of the tree and keep them all on side with us. They don't care about the long-term impacts on ordinary hardworking Australians. It seems to me that this government has learnt nothing from the financial sector royal commission.
Mr Morrison can put on his baseball cap and claim that he's an ordinary suburban dad as much as he likes, but what's really going on is he's much more focused on letting large financial institutions off the hook. What he's interested in, in his baseball cap, is stopping any kind of scrutiny on large companies and on large financial institutions. He can say, and he does say every day in his daggy dad routine, that he's standing up for ordinary Australians, mate, but you just get a little bit behind the door and the street angel is a house devil. A house devil over in the chamber, the green chamber—and he has got a whole lot of friends in the red chamber bringing about his agenda—
Senator Sterle interjecting—
That's true, thank you, Senator Sterle, indeed only the ones who get promoted. Mr Morrison saying he stands up for Australians is about as truthful as his responses to so many questions about his responsibility. We've got a bushfire: mate, he's not holding the hose. We've got a terrible problem in aged care: it's not his responsibility. We've got a COVID pandemic: the states can look after that. You watch him, he's going to be running from the vaccine problems that his government will inflict on this country. We've seen it already. They're days behind. They'll be weeks behind. I want that vaccine out. I want it in my community. Mr Morrison is not to be trusted and he's not to be trusted on the piece of legislation under debate today.
Firstly, I would like to thank the senators who have contributed to this debate on the Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020. Schedule 1 to the bill strengthens the protections for consumers who are clients of financial advisers under ongoing fee arrangements to prevent fees for no service. Under this legislation each year the client will receive a forward looking summary of the fees they will be charged and the services that they will be entitled to, in addition to the existing disclosure of fees and services. The fee recipient will need to obtain the client's express written consent prior to fees being deducted from an account held in the client's name. And ongoing fee arrangements will need to be renewed annually, instead of once every two years.
Schedule 2 of this bill introduces a new disclosure obligation to ensure that financial advisers who are not independent in relation to the provision of personal advice clearly declare that they are not independent and explain the reasons why.
Schedule 3 to the bill strengthens protections for individuals against paying fees for no service from their superannuation by prohibiting ongoing advice fees in MySuper and increasing the visibility of fees to individuals.
I would like to thank the opposition and also the crossbench for their very constructive engagement on all of these issues. The government has committed to establishing a single disciplinary body for financial advisers in line with the recommendation 2.10 of the Hayne royal commission. In expanding the Financial Services and Credit Panel to perform this function, we're committed to ensuring that advisers act in the best interests of their clients and in line with professional standards. Standards are integral to the professionalisation of the financial advice industry, and we will work to ensure that the framework that is in place for the industry to enforce these standards is strong. These are very important reforms that will restore confidence of Australians in Australia's financial system. I commend this bill to the Senate.
Question agreed to.
Bill read a second time.