The Federal Opposition has attempted to bring forward the debate on the Government’s Future of Financial Advice (FoFA) amendments, calling for Senator Mathias Cormann to table the newly minted regulations in the Senate.
Addressing the Senate earlier this week, Labor Senator Sam Dastyari accused the Minister for Finance and Acting Assistant Treasurer of stalling by refusing to table the regulations.
Under Parliamentary process, legislative instruments such as regulations must be forwarded for tabling in both Houses of Parliament within six sitting days of being registered. The Corporations Amendment (Streamlining Future of Financial Advice) Regulation 2014 was registered and became law on 30 June 2014, meaning Senator Cormann has until 15 July to table the regulations. It is widely expected that the Opposition will move to disallow the regulations, once tabled, with the support of the Greens and the Palmer United Party.
Senator Dastyari asked: “Why did the Acting Assistant Treasurer regulate and not legislate the winding back of the Future of Financial Advice reforms? If he is so proud of his changes, why did he make the regulations in the dead of the night and gazette them on 30 June—less than 12 hours before they were due to take effect? Minister, when will you be tabling these regulations?”
Senator Cormann responded to Senator Dastyari’s question, saying: “…that the government will table these regulations consistent with the laws and consistent with usual practice.”
We are focused on the public interest—not on the commercial interests of the union movement
The Acting Assistant Treasurer also added fuel to the FoFA fire, accusing the former Labor Government of introducing legislation that would benefit the industry super funds network.
“We are keeping in place the consumer protections that matter, but we are getting rid of the excessive, unnecessary red tape that Labor imposed at the behest of the union movement in order to protect the commercial interests of the union movement. We are focused on the public interest—not on the commercial interests of the union movement,” Senator Cormann told the Senate.
“We did not support the massive increase in red tape imposed on small-business financial advisers but not imposed on advisers in industry funds. We understand that the Labor government was motivated by the commercial interests of Industry Super and the union movement. We on this side of the parliament understand that not every bit of red tape is good for consumers. Where red tape pushes up the cost of advice, it makes access to advice less affordable for many people saving for their retirement, managing their retirement and managing financial risk through life. In those circumstances, red tape is not good for consumers and it should be removed. That is what we are doing.”
When the Government again did not table the regulations in either House on Tuesday 8 July, Senator Dastyari took the unusual step of seeking leave to table the regulations himself.
However, the Government refused to grant leave for Senator Dastyari’s motion, and the regulations remain un-tabled.
Meanwhile, Senator Cormann has indicated that he will target the industry super funds network with expanded advice legislation if the FoFA regulations are disallowed.
Taking to Twitter, Senator Cormann posted the following response to questions about his determination to remove elements of the FoFA legislation:
‘Why should advice through industry super not comply with the same FoFA rules as advice provided by small business advisers?’
And:
‘If FoFA red tape stays it should stay for all.’
Industry Super Australia (ISA) responded that industry super funds operated in the same regulatory framework as bank-owned super funds when providing financial advice.
In related news, a report from ISA on the FoFA regulations has been labelled misleading by the Financial Services Council and the Association of Financial Advisers. Click here for more.
Why should advice through industry super not comply with the same FoFA rules as advice provided by small business advisers?’
And:
‘If FoFA red tape stays it should stay for all.’
Well said Mathias, but the poor unions say it isnt fair targeting them. Given their corrupt history a more apt way forward is the removal of all unions from running these funds. Watch the ABC & Fauxfacts go crazy then.
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