Bill Shorten (Maribyrnong, Australian Labor Party, Minister for Financial Services and Superannuation) Share this | Hansard source

In terms of the government amendments to the Corporations Amendment (Future of Financial Advice) Bill 2012 and the comments made by the opposition, I just have a few points to set the record straight. The opposition failed to amend the FOFA bills. The amendments they proposed included to remove the opt-in arrangements entirely. That failed because the opt-in requirement was recommended with respect to superannuation advice provided to MySuper members by the Cooper super system review. It stayed in because it is a good idea. The amendment of the opposition concerning the removal of the disclosure arrangements for existing clients failed because the disclosure arrangements for existing clients are not retrospective. They only apply from the date of commencement.

The proposition that the opposition will vote against delaying the compulsory compliance date until 1 July 2013 is ludicrous because it would deny the industry the opportunity to comply with the laws on a voluntary basis during the transition period, yet they will not support a completion date by 1 July 2013. The opposition proposes removing the requirement that advisers take any step in circumstances that could be reasonably regarded as in the best interests of the clients. Our concern is that the opposition amendment, if it successful, would allow a tick-a-box approach to compliance with the best interest duty rather than a genuine consideration of what is in the best interests of retail customers.

But the opposition has made some further points in their contributions on the amendments proposed by the government—that is, the idea that people are not ready for change. We accept that for some organisations in financial planning it will take up until 1 July 2013. These are complex reforms. But many organisations in the financial planning world are already ready. Many of them advise me that they are FOFA ready. The Financial Planning Association of Australia advises me that they believe that a lot of their members are already ready. Indeed, if that does not satisfy the opposition and allay their concerns, I would draw attention to the fact that there are plenty of commission-free products coming on the market right now in anticipation of our FOFA changes. The opposition also made some references in opposing our amendment by saying that what we were doing was not good for consumers. How do they then explain away Choice supporting what we have done in the future of financial advice reforms? In other words, members of the House, through the Deputy Speaker, a whole lot of people in financial wealth management, in consumer groups and even the Financial Sector Union have supported our FOFA reforms. The final observation I have to add to this debate is that on one hand the opposition say that the changes are being rushed and are complex. Yet on the other hand, if the opposition when they were in government back in 2001 had done what we had done, then arguably some of the problems we have seen arise out of Trio and other financial service areas would not have occurred. To me the question is not, 'Are we taking this too quickly?' to me the question is, 'Why didn't this occur 11 years ago?'

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