David Gillespie (Lyne, National Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024. This is a six-schedule bill that covers a mixture of legislation covering a mix of general revenue and financial matters for many industries: the entertainment and arts industry, in particular, moviemaking; the petroleum and resource extraction industry; financial advisors; and other income tax assessment matters. The first schedule is a response to a review that was commissioned in the last government. There are many commonsense reforms. There was a commission of inquiry by Justice Hayne into financial advice and many recommendations were made.

This bill amends the Corporations Act, changing and clarifying financial advice fees. We all need our superannuation fund to achieve the best for our investments. Good advice is worth its weight in gold is a very sound piece of common sense but there were many cases where financial advice was not up to scratch. In fact, untrained and unqualified people were giving financial advice to over-the-counter investors at banks. A lot of conflicted advice was delivered.

Financial advisors across the industry traditionally have been very experienced people who have worked in the finance industry, grown with it and had on-the-job training as well as a background educational qualification for it. But all the uncertainty around these new regulations, the fees they can charge, the extra refresher courses and all the recertification processes for many people who are as wise as Solomon regarding financial matters has led to an exodus of financial advisors from the financial advice industry, such that we only have 16,000 left across the country. Considering we have 26 and a bit million people, who all have super funds and who all, at some stage of their life, will turn for financial advice, it's a bad situation. To have many more of them leave will have major consequences for mum-and-dad investors through to high-scale, sophisticated investors.

One of the things we have highlighted that our support will be contingent on is fixing the drafting around the ban on insurance commission structures that are linked with financial advice. Many independent financial advisors put an awful lot of time and their reputation at risk. An income earner having some insurance at the back to support their family, should accident or illness or sudden death happen, during their productive work life, is a pretty sensible thing. I know that, when I was employing 13 people in a day surgery and a medical practice, supporting my wife and family, and paying off business loans and housing loans, there was a lot riding on my health. Fortunately, I had an adviser who gave me good advice and said: 'A person like you needs income protection insurance because there is so much riding on what you are doing. Your whole business could go out if you get sick.' Thank goodness he did, because I did get sick and I was out of work for three or four months, which I couldn't have got through if I hadn't had that insurance for the business and for me personally. So financial advice is really important, but some of the financial advisers won't have a business case if they cut most of their fee advice parameters and make it bundled into one price, and that's what we think needs fixing.

Another schedule, which I'll move on to now, is updating the petroleum resource rent tax anti-avoidance rules such that income tax assessment will be much more robust so that people can't avoid their rent tax. Mining and resource licence depreciation is a matter of some importance because some of these licences are held for years, and people have been depreciating the value of them without actually doing any mining or assessing for oil and gas.

The next thing is another technical financial legislation amendment. For countries where we already have treaties—like in free trade agreements—establishing financial institutions, any time legislation on either side of the ledger gets changed, it can lead to a lot of other paperwork. This will streamline that so that automatic changes of legislation will be incorporated into the process such that the intent of the original policy continues.

The last one I want to talk about, which is very pleasing to see, is schedule 6, which amends the Income Tax Assessment Act 1997 for movie production. There is a location tax offset built into the system to encourage movies to be made here in Australia. They got a tax deduction of 15 per cent of the value of the work that was done making the movies here. If we didn't have that, we would be at a competitive disadvantage, because lots of other countries give a similar tax break or an actual co-investor grant. Making movies is a very competitive world, and, if we want to, we need to make sure that our industry people get the benefit of large-scale productions in this country.

This refundable tax offset has been very successful, but we had an outstanding committee inquiry in the last parliament looking into this, and many recommendations were made to increase the location tax offset to encourage bigger investments by overseas movie makers. There were conditions attached to that, including a minimum expenditure threshold or a minimum number of actual hours over the season that the movie was being made and work was being done on the movie here. So it was encouraging activity and billing the cost of work that was done here, not something that was done in postproduction back in England, France or America if they were overseas people coming here to make movies. So this will simplify matters. The minimum rate for that location tax offset will go from 16½ per cent to a much more internationally competitive 30 per cent. The minimum qualifying production threshold will increase to $20 million, or $1.5 million per hour for a television series—and some of the series that are made now, like Netflix or Stan serial episodes, and up really being a very long movie.

We want to grow domestic employment in movie production, and this will be very rigorous. There'll be minimal training obligations to contribute to the broader Australian workforce and infrastructure in the Australian capability. It will also require one or more Australian postproduction digital and visual effects providers to work on the program. That was a problem with the old system, because people could come here and do the work when actually filming the movie, but then all the postproduction would be back in the mother country where the original production team came from. But that's one of the skills that we have here. We are really good at all that postproduction digital stuff: cutting, editing, music, score—you name it.

The minimum expenditure threshold to get the producer tax offset for drama series is now $35 million per season in qualifying Australian production expenditure. This is a good encourager for iconic Australian productions. The quality of the productions that we've seen recently on Netflix is unbelievably good, looking at some of the recent series that I have seen that were wholly and solely Australian produced. It was really pleasing to see Boy Eats Universe. That turned out to be a wonderful series, true to the book and very popular overseas.

Finally, the forum on GST and administration subgroups in the industry were consulted on this. It has probably been one of the most discussed issues in the arts and entertainment industry for the last three years, and I'm pleased that this is coming through. But they really do need to tidy up the advice of the financial advice sector to not ban a commission for insurance sold when you're getting financial advice. Otherwise, as I mentioned, many more of our remaining financial advisers will become unviable.

The best advice you can get is accurate, good, independent advice. If our independent financial advisers leave, we will end up back in the situation of egregious financial advice being given by the same institutions that are selling the advice. Unskilled people in banks, through over-the-counter advice, were leading people to in-house products, rather than an independent financial adviser looking at the whole scheme of products that you can invest in and looking at the whole person, including all those risks that you use insurance to mitigate. If you can insure your risk, and it comes at a good price, it's a good idea. But if this was followed through to its full extent, a lot of that wouldn't be recompensed, which means you would be getting much less effective advice.

Otherwise, we continue the debate, and I commend the bill with that reservation to the government—that we need to change that and correct the drafting.

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