Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Hansard source

Every day we see more and more evidence of just how unfair this government really is—unfair in terms of the budget and what it is doing to ordinary people, and unfair in terms of what it is doing to protect consumers, to protect pensioners and to protect families. We have no more evidence of that than having a look at the changes they want to make to the Future of Financial Advice laws, laws that are specifically designed to protect consumers—to protect pensioners, to protect families—and, most importantly, to protect their life savings and retirement savings.

It is not as if we haven't seen enough horror stories in this space out in the community. There are the stories of the collapse of Storm Financial, Trio and Westpoint. It is a list too long to detail here. They are names that just slip off the tongue, but consider the very real people that those collapses impact on. In Storm's collapse alone 14,000 different people lost some of their life savings or all their life savings. Some were left in a position so destitute that they will owe for the rest of their lives money to banks and other lenders. These were people who were very financially sound before being involved.

What Labor did was put in place some good, sound, solid protections to protect those people. What this Liberal government is doing—very, very tragically—is ripping away at all of those protections. Let me make it absolutely clear: the Liberals have got it wrong, just plainly got it wrong. You cannot argue your way out of this one. You cannot demonstrate your way out of this one. Your own Senate report, your own Senate inquiry into FoFA changes, clearly states it. Your own senators tell you you are wrong, your own report says you are wrong. It says: 'Go back to the drawing board. Have another look.' There is evidence of that everywhere we look.

Let me go back and just explain to people why it is so important that we not only keep FoFA protections but we improve on them and we enhance them. If we do anything, we need to do that; not wreck them, not pull them apart. If only this Liberal government would understand that in opposition people might accept you swing the wrecking ball, but when you get to government, stop wrecking. You are in government now. It is not your job to wreck everything anymore. Don't wreck people's life savings. Don't be part of that. Help us clean it up, help the regulator clean it up. Listen to the voices out there—not just the voice of Labor but of National Seniors, of the Council of the Ageing, of Choice, of Industry Super Australia. There is a list of them—and I will come to that list, because I think there might be one or two of your friends on that list who are telling you you are wrong as well.

These were significant reforms. These were reforms that went to the heart of what needs to happen, because this is not easy to fix. You have got to change behaviour and you have got to change culture. If you are going to do that you have to somehow put in words in law and through regulation something significant enough that actually helps and enables the sector. The financial services sector, which is good, sound, very necessary—and from Labor's perspective needs to grow itself, needs to professionalise. That is what sector wants and that is what we want, because we understand it is essential for people to not only get more advice but get good quality advice.

It is just not good enough to come in here and rip away and destroy what is basically five years of really hard work. It is hard work not just by us, not just by Labor, but by the sector itself. It is the hard work of the community. We have just seen too many horror stories. The horror stories do not stop They are still coming out of Senate inquiries and other inquiries, out of the things that we see in current affairs programs about consumers who have lost all of their life savings. When you sit down with them and look them in the eye and see the tears and hear the catastrophes that have happened to them through no fault of their own but because they were defrauded, robbed or the victims of really poor advice, you have to question yourself and say, 'Why do we stand up so much for FoFA and protecting consumers?' But then I ask myself, 'Why is this Liberal government so determined to pull it apart, so determined to get rid of the best interest duty?' I will not take for a minute what this government and some of its cronies says about best interest being safe because they are going to write it in there. You can write it on every page at the top of the page and at the bottom of the page but your changes to the law still take it away and diminish it. You cannot argue that.

When it comes to opt in, it is one of the few mechanisms that is available to us if you believe in standards, if you believe in changing culture and best interests. It is one of the few ways that you can actually help the sector. The majority of them actually contact their clients on a regular basis, not once every two years, but on a regular basis: once a month, once every three months, once every six months. We think it is quite reasonable to say at least once every two years make contact. At least do something for the clients, because—you know what?—it is not for free; you are actually charging people fees. If you are going to do that we say do it and do it properly.

On annual disclosure it is not just about disclosure. Yes, there is some disclosure, but it is about meaningful disclosure—disclosure for everybody in the financial services sector not just for new clients from some day forward. It is about disclosure for everybody. That is not retrospective. It just says that it applies from this day forward but it applies to everyone equally and fairly, not just a few lucky people who for the first time get some advice now. What about the people about to retire? What about their life savings? What about the need for them to know? I do not think it is stretching it too far to say to everybody in this chamber: 'If you pay for something, would you like to know exactly what you are paying for and what you are getting in return?' Because that is our expectation and I am sure it is everybody's expectation.

When it comes to conflicted remuneration and banning commissions, let us just get it right. The minister now has had a sudden revelation. Something has just sort of descended upon him—the fog, the confusion. He says that they are going to re-ban commissions. I just say to him: 'Minister, you don't have to toy or play with words. We have already banned commissions. You cannot ban them twice. What we are saying is don't take the ban away.'

What is at stake here is significant. It is the national retirement pool of savings worth $1.84 trillion—that is right, 'trillion'. Let me tell you: never stand between a pot of gold that big and a whole heap of people who would love to just keep pulling more fees and charges out. But they want to do it quietly. They do not want you to know. They do not want the opt-in every two years, just in case you find out. They do not want you to tell them how much you can or cannot, or whether you even agree. And you do not have to take my word for it. I would just say to you: read the explanatory memorandum from the government and read the regulation, because it actually says it in there.

I love talking to people from right across the sector, because I think that they are doing a great job, on the whole. Individual financial advisers go out there with the best interests of their clients and their customers at heart, and the problem is that they do not always get to choose. Under these laws, they will be pushed and directed more to sales than to advice. It should always be the consumer that comes first. We wrote in for the first time that an adviser has to put their clients' interests ahead of their own. Does that sound outrageous—that, if you are paying someone to give you advice, they should put your interests ahead of their own? I do not think it is. I think it is one of the cornerstones—best interests, opt-in.

For me, there is some real clarity around all of this. It is not just if you take each of these issues that the government is wrecking—absolutely destroying and taking out; it is if you take them combined. If you take each one of these combined, as a package, what impact do they have? Let me tell you what that impact is. It destroys the best interests, it destroys opt-in and it destroys proper disclosure. It destroys all those things. If you turn to the technical elements of what is in this bill, it is there in black and white for anyone to read. The minister does not have to ban commissions twice. They are already banned. Leave them the way they are.

So who benefits? I just say: follow the money and have a look at who is involved and who benefits. The four major banks, and AMP, control 80 per cent of the finance advice business in Australia. Good luck to them. But they should not, at the same time, be in concert with the government trying to diminish the good protection measures for consumers. I reckon there is an easy choice. It is a choice that we can make every single day, and we do, when it comes to a whole range of issues. We get a choice in this place. Just in case you are confused or you are not sure, I will just put it to you very simply: if it is a choice for me and for Labor between siding with the banks, AMP, those who charge fees, those who would argue till they are blue in the face and say, 'It doesn't do that much anyway, so you can get rid of it,' and siding with consumers and their life savings and their potential to have a better retirement because of good, sound, decent protections, then I will always side with the consumer, and Labor will always side with the consumer. So to the Liberal Party, I would just say this: you choose; are you with the banks and big money or are you with consumers and ordinary people and people who are in retirement? Who are you with? We know who we are with.

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