Senate debates

Tuesday, 31 August 2021


Banking and Financial Services

7:35 pm

Photo of Deborah O'NeillDeborah O'Neill (NSW, Australian Labor Party) Share this | | Hansard source

I rise to speak on the pathetic failure, in fact, of the Treasurer Mr Frydenberg to adequately protect Australian consumers. The Treasurer has once again missed another deadline for implementation of a crucial reform recommended by the Hayne royal commission. What could be more important, more crucial, than ensuring that consumers scammed by companies are able to access restitution? I'm talking of course about the Compensation Scheme of Last Resort—long promised by this government, but still not delivered.

This is the government that voted 26 times against a banking royal commission, and it's still slow-walking its recommendations, or even jettisoning them completely. As we've seen with the attempted repeal of the responsible lending laws, the coalition government is unwilling to legislate to protect Australian financial services consumers.

A small delay is understandable, given the pressures of COVID-19, but this is just another example of the Treasurer kicking the necessary and promised reform into the long grass for another six months. This is the second time that this particular reform, which consumer group Choice called the most important recommendation of the banking royal commission, has been delayed by six months. It just cannot continue to be kicked off into the long grass. There is no reason for delay.

Over the past year, more Australians than ever took out superannuation savings from their funds. Some of them were forced to use additional financial products to attempt to make ends meet during this recession. Yet, despite their efforts and their need to use financial products, they have no recourse to financial compensation if the regulator looking after this sector finds that these Australians were actually given misleading advice.

The delay by this government has real-world effects. The Australian Financial Review reported in June that AFCA have had to pause work on cases for one reason: until Mr Josh Frydenberg finalises this Compensation Scheme of Last Resort, AFCA can't do their work. AFCA are turning people away at the door because, in the words of their spokesman:

AFCA did not feel it was right to ask consumers to invest considerable time and energy in pursuing such matters until it was clear there was a prospect that they may be paid compensation if awarded.

The ABC reported that 620 Australians have been asked to wait indefinitely for access to financial compensation until the Treasurer decides to get his act together. This is appalling governance. What we see constantly from those opposite—these are interactions that I hear about through my office—is that people go to their local member and they say, 'I've got this financial product problem,' and they get the standard response: 'Off you go; go to AFCA and they'll help you.' Yet the reality is that the Treasurer's inaction by sitting on his hands is preventing those people from getting the recourse that they deserve so much.

Justice delayed is justice denied. Australians, who the regulator has ruled have been dudded by misleading financial advice and products, aren't able to access financial compensation because the government just hasn't bothered to legislate the appropriate frameworks. Now these victims of financial crime may not see a cent until 2022, and many of them have already been waiting years for just compensation. I can't think of a time of more heightened financial pressure for so many people than right now, as COVID is escalating in its impact through our economy, our families, our communities, our small businesses in particular, and amongst those who have invested in financial products who have a right to expect that the government regulates the sector that they're responsible for.

The government's had plenty of time on its hands. It found time to attack the super industry, the one sector that actually came out of the Hayne royal commission unscathed, yet it cannot find the energy or the heart to get everyday battlers the compensation they deserve. It's a searing indictment of the heartlessness and lack of direction of the Morrison government. Minister Frydenberg cannot delay this reform any longer. I call on him to give the people what they were promised: a compensation scheme of last resort.