Paul Fletcher (Bradfield, Liberal Party) Share this | Hansard source

I am pleased to rise to speak in relation to the amendments made in the Senate to the Corporations Amendment (Future of Financial Advice) Bill 2012 and the Corporations Amendment (Further Future of Financial Advice Measures) Bill 2012. Throughout the consultation process with the financial services sector in the lead-up to this legislation being introduced into the House, it was clear that there was considerable disquiet within the financial services sector about the very substantial degree of work required to be undertaken to comply with the detailed and onerous requirements in this legislative package.

There are two issues which are quite distinct. One issue is the merits of the amendments. It is not really appropriate to be discussing the merits of the substantive legislative scheme which is being enacted here today. But the other and distinct issue which it absolutely is appropriate to discuss—because it emerges very directly from the terms of the amendments which have been moved in the Senate and which the House is now considering—is the practicalities of implementation of the very complex legislative and regulatory scheme set out in the future of financial advice bills. The scope and complexity of the changes to information technology systems which will be required to be made by the financial services sector in respect of accounts held by many millions of Australians in many different kinds of products—in many cases products which have been on foot for 10 or 20 or 30 years and the statements for which are provided using legacy IT systems which will need to be reopened and amended to give effect to this policy scheme—are enormous. That has been the constant theme of those who appeared before the parliamentary committee which was considering this bill, and that has been the constant theme of those in the financial services sector who have been to speak to many people in this place over recent months.

The government presents to us the amendments which have come back from the Senate as offering the solution to this problem. We are told that relief has been granted and it will no longer be necessary for participants in the financial services sector to achieve compliance with this detailed scheme, with effect from 1 July 2012. Instead, strict compliance has been deferred until 1 July 2013. But on even the most cursory analysis the method which has been adopted to achieve this outcome is ludicrously and unnecessarily complex. What is proposed in the amendments which have come back to the House from the Senate is that the obligations under the law will be in place from 1 July 2012 but there will be relief granted from compliance with those obligations until 1 July 2013, unless of course an entity which is subject to those laws lodges a notice between 1 July 2012 and 30 June 2013 indicating that it now regards itself as being subject to compliance with these laws. It is difficult to conceive of a more complex, confusing, opaque method of dealing with a fairly straightforward problem.

Why is this being done? It is being done for one simple reason. It is being done for political reasons. It is being done because the minister at the table wants to be able to say, 'This package of reforms will take effect from 1 July 2012.' That is his sole and only motivation in coming up with this ludicrously complex scheme so that he, on the one hand, can say, 'I have delivered an outcome and this adds to my glittering and already extensive curriculum vitae.'

Regrettably, costs will be incurred by many millions of Australians and by many financial institutions in complying with this unnecessarily complex set of arrangements. There will be deep confusion on the part of Australians who are provided with products by the financial services sector because they will not know, without making detailed further inquiry, what their rights are and what the obligations of the provider are. This is a messy, unsatisfactory compromise and it should be rejected.

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