Chris Bowen (McMahon, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

They were very good ombudsman services.

Ms O'Dwyer interjecting—

I was allowed to answer questions during question time when I had the portfolio, so at least I had that over the current minister. What we had was the financial ombudsman—and I would have dealt with payday lending, as the member for Oxley correctly points out. We did have Future of Financial Advice reforms other great reforms which improved consumer outcomes. We wouldn't have squibbed it on payday lending. I have to pay respect to the minister, she didn't squib it and she didn't want to squib it; she was rolled on that. The member for Perth and the member for Oxley will continue to prosecute that case on our behalf. The point I was making was that these are good ombudsman services and they work as they are currently constituted. They don't resolve every matter to every client's satisfaction, but they certainly get to the bottom of many and they lead to better outcomes. What the minister couldn't do in her second reading speech was outline how consumers will actually be empowered by these reforms, because they won't. The average consumer who's got a problem won't see any difference from whether they go in today to the Financial Ombudsman Service or they go in after the AFCA is established. They won't have a different experience and they won't have a different outcome; they'll simply have one body instead of three.

In relation to the Superannuation Complaints Tribunal, we are not convinced that this should be rolled into the AFCA. The Superannuation Complaints Tribunal provides quite a specialised service, a different role. The Superannuation Complaints Tribunal is quite a different sort of a body to the others. The Superannuation Complaints Tribunal deals with very complicated and detailed matters in relation to superannuation, which is a particularly complicated and complex form of law, and we don't think it's appropriate that it be rolled into these bodies. Under this legislation, disputes over an individual's superannuation will now be lumped in with those from the banks, insurance, payday lenders and others. Our overriding concern with the proposed abolition of the Superannuation Complaints Tribunal is that no evidence has been produced to demonstrate that the abolition of the tribunal and its replacement by an ombudsman scheme will result in more-efficient and better outcomes. This is the key point: the Superannuation Complaints Tribunal actually works quite differently from the other two ombudsman services. They have a different role and a different way of dealing with these matters, and we think that lumping them in with the ombudsman on a similar basis is a backwards step. The government—

Ms O'Dwyer interjecting—

and the minister, if I understand her interjection correctly—has pointed to delays in the resolution of complaints by the Superannuation Complaints Tribunal. That's a reason to shut it down? You could give it more resources and actually help it do its job. But, no; they say: 'We'll shut it down. We'll throw it in with the ombudsman. That'll fix it. We'll get rid of it. If it's taking too long to resolve problems, we'll just get rid of the Superannuation Complaints Tribunal.' That's the government's logic. These delays are of course a reason for concern, but they're not a reason for abolishing the tribunal. I can think of any number of ways the government could have approached the matter of Superannuation Complaints Tribunal delays other than by abolishing it.

The Senate inquiry demonstrated that this government has neglected the Superannuation Complaints Tribunal quite dramatically. It's consistent with this government's ideological attacks on superannuation that they're dismantling a statutory tribunal for superannuation that has been an important part of Australia's compulsory superannuation system. The Superannuation Complaints Tribunal was established in 1993. It was introduced at the time that universal compulsory superannuation was also introduced, and it has served the nation well over that time. If the government have concerns about delays then, as I said, they could have any number of ways of dealing with them.

I agree with the chairperson of the Superannuation Complaints Tribunal, who told the Senate hearings into this bill:

I don't think it would be true to say, in relation to super, that it's a rebranding exercise. Arguably, it's quite a significant change for superannuation, specifically in terms of the external dispute resolution. It goes from a statutory body to a non-statutory body. It moved from a specialist body to a one-stop-shop body.

We have concerns about removing the statutory body when it comes to superannuation. When it comes to superannuation complaints, people have the right to have a powerful tribunal, a body with teeth, and this government is taking away a statutory body and lumping it in with the other ombudsman services, which have operated quite differently. We moved amendments in the other house to that effect. Those amendments failed. We don't like that, but that was the result. We don't regard it as a reason to vote against the bill as a whole, but we are pointing out that we think that the government has failed here and that to abolish the Superannuation Complaints Tribunal is the wrong lever. It won't stop us supporting the bill, but it does mean that we will point out strongly that the minister at the table has, I think, made a serious error in this regard.

We also have serious concerns about the transition arrangements for AFCA, as currently outlined in the bill, which are worthy of a few comments. The government has said that AFCA will start from 1 July 2018 for new complaints. As that is not that far away, we're hoping the government has given proper consideration to making sure this transition process works. The Senate inquiry raised concerns about this. Mike Taylor, in Super Review, summarised some of these concerns about the process in light of evidence given to the Senate. That report said:

There is much to suggest that the creation of AFCA represents a bureaucratic slow-motion train crash with the Treasury officials confirming that the financial services industry will have to deal with four different external dispute resolution schemes for at least a year after the necessary legislation is passed and that the SCT will still be clearing its workload as late as 2022.

So we're going to have a very long transition from the Superannuation Complaints Tribunal to AFCA—until 2022. This is going to create more uncertainty. It's not a one-stop shop; it's a four-stop shop that the minister's creating during that transition period, and we don't think that that's a very clever way of dealing with it either.

We questioned the government in the Senate about transition plans and about how they would make sure the transition would work, and the lack of detail in the answers was very concerning. It seems that, since the bill passed the Senate, the government has announced additional funding, in MYEFO, to help the Superannuation Complaints Tribunal work through its existing workload. Well, that's good. But it was concerning that the government did not appear to have properly planned for this when they announced the AFCA in the budget.

This has been an ill-thought-out process. It has been one which was very clearly created to avoid the need for a royal commission. Remember that period in which we had weekly announcements of new and shiny things in banking and financial services designed to avoid the need for a royal commission? We've had many announcements of things that were designed to stop the royal commission. The government were desperate to avoid the royal commission, and they were very reluctantly dragged into calling the royal commission. We were told by the government it was regrettable that we needed to have a royal commission, and yet that royal commission has started now.

I note the royal commissioner's comments—and I welcome his comments—about confidentiality and standing in the way of the royal commission's activities and operations. We will watch its activities with interest, more interest than the government, who didn't want to hold the royal commission in the first place and went through this elongated process and are somehow now pretending that amalgamating three dispute resolution mechanisms into one dispute resolution mechanism is some great step forward when it comes to consumer protection. That's simply not the case. It is an administrative measure which might provide some efficiencies in the back office et cetera, but let's not pretend that this is any great step forward for the Australian people. It's been done for the wrong reasons and the implementation has been botched.

We will vote for the bill, because we have no in-principle objection to at least two of the three coming together, and our objection to the third complaints tribunal being brought into this body is not so strong that it would prevent us voting for the legislation and facilitating its passage through the House.

Debate adjourned.

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