Michael Keenan (Stirling, Liberal Party, Minister for Justice) Share this | Link to this | Hansard source

I move:

That the amendments be agreed to.

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

These final amendments to the Future of Financial Advice arrangements represent the triumph of Labor and consumers over the government. Today marks 714 days since those opposite introduced a bill to comprehensively attack Labor's FoFA reforms. A lot has changed since then. We have had a new Prime Minister, a new Treasurer and multiple assistant treasurers. We have seen a whole series of messy deals and backflips and theatrics in the Senate on this bill. Today that ends. I am very pleased and satisfied to stand here today and say that Labor and consumers have won. We prevented some very bad legislation from passing, and all that is left to consider today is some tidying up of the original package. We have cemented the most important reforms to financial services in a generation and have protected consumers in the process. I pay tribute to all who have fought for these protections, in the community and in this place, especially the member for Oxley but also the members for Maribyrnong, McMahon and Lilley and the former member for Lindsay, and, in the other place, senators including my friend Senator Dastyari.

We introduced the FoFA reforms in the wake of the collapses of Storm Financial and others, and after the member for Oxley's important parliamentary inquiry into financial advice, products and services. The resulting Future of Financial Advice package was widely regarded as the most significant reforms in financial services in a generation. Labor's package contained a variety of measures designed to protect investors and help the industry professionalise. They required advisers to act in their client's best interest. They required clients to opt in to receiving ongoing service every two years. They ensured statements would be sent to clients annually disclosing fees and details of services provided and performed for those fees. And they banned conflicted remuneration. The whole basis for introducing the FOFA reforms was to restore faith in a sector rocked by high-profile collapses and a poor culture of product sales over advice and also to ensure that Australians are getting advice and service that is in their best interests.

It says it all about the coalition government that one of their first policies announced when they came into government was a watering down of protections for consumers. If they had had their way, they would have completely unwound the good work done in the FoFA package. The net effect of their proposal would have been to remove the requirement for financial advisers to act in the best interest of clients; to allow advisers to continue to charge fees indefinitely, without receiving consent from their clients; to not require advisers to provide annual disclosure to pre-2013 clients; and to allow conflicted remuneration on general advice and certain types of personal advice, opening the door to a sales push culture of products over genuine advice.

In 2014 the Senate, in its wisdom, rejected these unfair changes. Then, in an embarrassing couple of weeks, the government entered into a cynical, underhanded deal    with the Palmer United Party which enacted the majority of their badly motivated changes by regulation. Labor dug in, and eventually the Senate came to its senses in December 2014 and disallowed these bad regulations. The legislation today enacts some of the minor technical amendments Labor agreed to in the wake of the government's regulations failing, including measures to ensure FoFA treats basic insurance products and non-cash payments consistently with other financial products; allowing consumer credit insurance to be included in the conversation a bank employee has with a customer; clarifying the application of the client-pays and intrafund advice provisions; and regulation-making powers to allow existing exemptions to conflicted remuneration to be wound back by the minister. Importantly, this amended legislation maintains the fundamental consumer protections introduced by Labor, proudly, in our original FoFA package.

So we are supporting these amendments to bed down some small but important technical clarifications. The government should get back in their box. They should not seek to make further changes to the Future of Financial Advice package. These reforms are a proud part of Labor's legacy in financial services. We are pleased to see the government finally abandon their attacks on our important consumer protections. I congratulate again everyone, around the country and in this place, who was involved in this victory that we celebrate today.

Question agreed to.