Stephen Jones (Whitlam, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

I present the supplementary explanatory memorandum to the bill, and I ask leave of the House to move government amendments (1) to (11) as circulated together.

Leave granted.

I move government amendments (1) to (11) as circulated together:

(1) Schedule 1, item 30, page 20 (line 12), omit "Personal advice", substitute "Financial product advice".

(2) Schedule 1, item 30, page 20 (line 16), omit "personal advice", substitute "financial product advice".

(3) Schedule 1, item 32, page 21 (line 12), omit "personal advice", substitute "financial product advice".

(4) Schedule 1, item 32, page 21 (line 19), omit "personal advice", substitute "financial product advice".

(5) Schedule 1, item 32, page 21 (line 24), omit "personal advice", substitute "financial product advice".

(6) Schedule 1, item 32, page 22 (line 15), omit "personal advice", substitute "financial product advice".

(7) Schedule 1, item 32, page 22 (line 27), omit "personal advice", substitute "financial product advice".

(8) Schedule 1, item 74, page 33 (line 4), after "being website disclosure information,", insert "that is defective,".

(9) Schedule 1, item 80, page 33 (table items dealing with subsections 943G(3) and 943H(4), column 2), omit "personal advice", substitute "financial product advice".

(10) Schedule 1, item 96, page 38 (lines 15 to 19), omit all the words from and including "Paragraphs" to and including "consumer credit insurance", substitute "If a financial services licensee or a representative of a financial services licensee provides, or is likely to provide, personal advice to a retail client in relation to a financial product (the relevant product) that is a general insurance product, a life risk insurance product, or consumer credit insurance, paragraphs 963B(1)(a), (b) and (ba) do not apply to a monetary benefit given in connection with the issue or sale of the relevant product to the client".

(11) Schedule 1, item 96, page 38 (lines 20 to 22), omit paragraph 963BB(1)(a).

The government is committed to making quality financial advice and information more affordable and accessible, after the financial advice sector was abandoned by the previous government. The Albanese government has a plan that will increase access to financial advice, and it's well supported across the industry.

The first tranche of legislation, which is currently before this House, cuts some onerous red tape for financial advice that adds to the cost of advice but provides no clear benefit to consumers. It also provides a clear legal basis for the payment of advice fees from superannuation and associated tax consequences. The reason we're doing this is the Quality of advice review found concerns about whether there was a legal basis to pay financial advice fees out of superannuation. Let's be clear: this means that, without this legislation, millions of Australians will be unable to pay for financial advice out of superannuation. Our legislation adopts the recommendation of the Quality of advice review to give Australians certainty that they can pay for financial advice out of superannuation.

I listened to the second reading debate. Members who claim to support affordable and accessible financial advice and who claim to support the findings of the Quality of advice review should be supporting this bill here and in the other place. As recommended by that review, our legislation maintains important consumer safeguards. Let me be very, very clear: there's no intent, desire or expectation that superannuation funds will need to check every statement of advice when they're paying out fees for financial advice. We've clarified this in the revised explanatory memorandum, which I've just tabled now.

Trustees must of course meet their longstanding obligations around the sole-purpose test and the financial interest duty. Under current practice, funds have been required to meet these obligations. Under our proposed legislation, funds will be required to meet these obligations. There is no new compliance burden on funds or advisers—none. The regulator has confirmed this; ASIC has publicly stated the expected compliance approach does not increase the course of this legislation.

Our changes to the explanatory memorandum make it clear that the assurance process may include, for example, random risk based sampling of advice; this is hardly an onerous burden on funds to simply maintain current practice. People who are suggesting an alternative need to explain why these important consumer safeguards should be watered down. This is also something that has real consequences. ASIC has recently released a report examining the practice of funds paying financial advice fees out of superannuation. Regrettably, ASIC still found that there were a number of circumstances in which fees for no service were discovered. This has the potential for great harm. It needs to stop immediately.

This is why our legislation maintains important safeguards to ensure that we do not condone this behaviour. Our amendments further cut red tape by extending the flexibility of the provisions for financial services guides to general advice scenarios, and we have reinstated the exemption to the ban on conflicted numeration in relation to certain insurance products where general advice is provided. As such, these amendments support improved access to quality affordable financial advice for millions of Australians.

Schedules 2 and 3 to the bill improve the operation and integrity of the petroleum resource rent tax. Schedule 4 to the bill amends the domestic legislation governing Australia's agreements with international financial institutions to automatically incorporate amendments made to treaties between Australia and these institutions to reduce the administrative burden of updating the legislation. Schedule 5 to the bill makes minor and technical amendments to various laws in the Treasury portfolio to ensure those laws operate in accordance with policy intent. Finally, schedule 5 to the bill proposes support to the Australian film industry—it will secure Australia's global competitiveness as a destination for large-scale film productions, provide domestic training and employment opportunities in the Australian screen industry, and support the continued production of iconic long-form Australian drama series. With those comments, I commend the bill to the House.

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