David Gillespie (Lyne, National Party) Share this | Link to 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.

Sam Rae (Hawke, Australian Labor Party) Share this | Link to this | Hansard source

I am excited to rise to speak on the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024. In beginning, I would like to acknowledge the thrilling and spirited contributions of the colleagues that have come before me.

The regulation of financial advice in Australia has been the subject of much attention since the release of the Hayne royal commission, which uncovered countless examples of financial institutions delivering conflicted advice that failed to put the financial interests of consumers first. While reforms were implemented in response, in many cases they have not resulted in improved financial advice but, rather, simply caused financial advice to be inaccessible to ordinary Australians. That's why the Albanese Labor government is committed to delivering a package of reforms that will ensure that quality financial advice is accessible to working people. This legislation represents the first tranche of that package, which comes in response to the government-commissioned Quality of Advice Review.

With this bill, the Albanese Labor government is reducing red tape and removing regulatory barriers that don't add a consumer benefit and are making professional advice very costly. By providing clearer legislative support for personal and general advice, this legislation will reduce the number of hoops consumers have to jump through in order to receive assistance. It will provide greater flexibility for providers of personal financial advice and apply that flexibility to more advice situations to maximise the benefits from this measure without weakening consumer protections. Specifically, this will enable providers to provide more tailored and relevant information to consumers by allowing financial services guides more flexibility, both in content and presentation.

At the heart of the government's proposed changes, through this bill and subsequent tranches, is the concept of accessibility. We want to increase the amount of high-quality advice Australians can access and ensure that it comes at an affordable cost. Currently, accessing qualified financial advice in Australia is a hurdle race for many. The high cost, often exceeding $5,000, puts it out of reach for the average person. Additionally, the number of qualified financial advisers has declined by approximately 35 per cent in the last five years and simply can't meet the growing demand from a population of over 25 million. This has left a gap filled by unregulated sources such as social media influencers. At best they offer very questionable advice and at worst they expose people to scams, potentially jeopardising their very hard earned savings.

That's why in response to the Quality of Advice Review the Albanese Labor government has proposed a new category of 'qualified advisers'. These professionals will receive specific training to offer simple, targeted advice on matters such as budgeting, superannuation contributions or navigating mortgage options. This will inject much-needed affordability and accessibility into the system.

These reforms will be particularly important for the five million Australians approaching retirement who may need support in navigating the pension and superannuation systems. Most of these people, especially middle-income earners, will retire on a mix of superannuation, personal savings and government support rather than fully self funding or relying on the age pension. With these various financial sources come a range of potentially complex decisions, and these reforms will provide far greater legal certainty to financial institutions about the provision of advice to their customers—for example, by allowing super funds to consider personal and household circumstances when providing advice to members.

It's worth noting that while the government's response to the Quality of Advice Review, including this legislation and subsequent bills, is about making financial advice more accessible it does not compromise the quality of advice or the financial safety of Australians seeking that advice. Ensuring that Australians can easily and affordably access financial advice is essential. With Australian households facing cost-of-living pressures, financial advice must be readily accessible to ensure working people are getting a good deal on financial products such as mortgages, insurance and superannuation. By removing roadblocks, increasing choice and prioritising safety, this bill empowers individuals to easily navigate financial product markets and get a better deal for themselves and their families.

These reforms are components of a broader Albanese Labor government plan to ensure that working people can access and take advantage of the best financial products and services the market has to offer. I commend the minister and their team for the diligent work and the values based commitment to this legislation. Our government will continue to deliver the necessary legislative reforms to deliver for working people in communities such as mine.

A division having been called in the House of Representatives—

Sitting suspended from 17:45 to 17:56

Allegra Spender (Wentworth, Independent) Share this | Link to this | Hansard source

The Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 contains a broad set of changes to a number of laws, so I will take these part by part.

Let me first go specifically to schedule 6 and the important and welcome changes to the location and producer offsets. These are of particular interest to my community in Wentworth, many of whom work in, or alongside, the film and television industry. Schedule 6 increases the location tax offset from 16.5 per cent to 30 per cent for an international film and television programs made in Australia and makes changes to the minimum expenditure thresholds for the producer offset. These changes provide support to international film and television producers operating in Australia and match the incentives provided by other countries who are competing against us for these productions. Without these changes, it's likely that international investment would be diverted overseas, harming our screen sector and the economy. The new laws will give greater certainty to both investors and the production industry. These are welcome changes which I and others have been advocating for since early last year.

The film and television sector is an extremely important driver of economic activity across our community. Close to 50 per cent of the industry is based in New South Wales, including over 2,300 screen production businesses that employ over 15,000 people. My electorate of Wentworth has probably the highest concentration of filmmakers and film and television companies in New South Wales, perhaps even in Australia. A simple Google search on film producers in the eastern suburbs of Sydney produces over 400 companies alone. According to Ausfilm, five major international productions have recently spent an estimated $28 million in Wentworth, while engaging more than 480 crew and over 260 businesses. If you haven't seen The Fall Guy yet, I encourage you to go out and see it, not just because of Ryan Gosling but also because of the wonderful Wentworth scenery that is on show.

The measures in this bill will help ensure that international producers keep making films in Australia, providing important investment in state-of-the-art production facilities, like the Disney Studios in Moore Park, and employing our talented crews and tech support. We know that, when large film and television companies shoot here, the economic benefit is felt across the community. It's not just our creatives but also those ancillary people and businesses that benefit, such as caterers, drivers, hotels and restaurants. It is also a great benefit to building skills, including screen skills, in our community. According to Screen Australia's Drama report, foreign dramas that shot in Australia spent a massive $809 million across the country in 2022-23. We must do all we can to ensure that these businesses and people continue to thrive into the future. I'm also pleased that the location offset will require that companies accessing the tax incentive use our digital and visual effects post-production companies, invest in training Australians and develop our infrastructure. These are important conditions that will contribute to the sustainability of our own local production industry.

While I support this legislation, I am concerned by the length of time it has taken to be introduced in the House and disappointed that it has not been accompanied by other measures to support our domestic screen producers. I'm particularly concerned by the delay in implementing Australian content obligations for international streaming services. Streaming services like Netflix, Binge, Apple TV and Disney Plus are at the core of how most people will access creative content in the future. If we want to continue to have Australian stories on our screens, it's essential we place a guarantee or an obligation on these streamers to produce local Australian content.

I've often spoken about how important our homegrown arts and cultural industries are to the health of our community. They help define us as a people, show us who we are to the rest of the world and help us understand the complexities of the world around us in our country. They build connections and a sense of belonging, which has never been more important at times such as these, when social cohesion has become so fractured. The domestic screen industry is just one part of our arts and culture ecosystem that helps build a sense of national identity and togetherness. It must be cherished and protected for the future.

I know the arts minister is dedicated and sincere in his support for the domestic screen industry, but, despite the government promising to bring in content obligations over a year ago, we are still waiting. It's time the government delivered on this promise. I urge them to act quickly so that our creative economy is not left exposed to the whims of international streaming services.

Let me now move to another schedule in the bill. I'd like to talk about schedule 1, about the Quality of Advice Review. Whilst I strongly support the provisions in schedule 6 of this bill, I want to put on record my concerns about schedule 1. Schedule 1 begins to implement the recommendations from the Quality of Advice Review, which made important proposals on how to improve the provision of financial service in Australia, remove unnecessary red tape and reduce the cost of advice to customers. Whilst the intent of schedule 1 has been broadly welcomed by the industry and I also welcome it, it is extremely disappointing to see that this first tranche of reforms has been marred by significant drafting errors. These have been highlighted by submissions to the Senate committee from organisations including the Financial Advice Association, the Financial Services Council, the Australian Banking Association and many others. It appears that there are drafting errors across several aspects to the legislation.

I want to highlight particular concerns in respect of requirements imposed on super fund trustees. As currently drafted, the bill inadvertently sets very strict conditions on trustees to comply with before they can provide advice to members—well beyond what I understand was the intention of the recommendations from the Quality of Advice Review. The Financial Advice Association has said:

In practice, these requirements would significantly increase red tape for both super fund trustees and for financial advisers.

The Financial Services Council has warned:

The unintended consequences of the drafting could undermine the positive intentions of the law.

It is clear that these drafting errors need to be fixed, and I urge the government to do this before it passes the House.

I would also like to raise separate issues in relation to the Quality of Advice Review in the sense that this is just a small selection of the recommendations that the Quality of Advice Review has made. I urge the government to move on the rest, because we have been waiting some time for the first movement, and that is why it is so disappointing that it is badly drafted. But the government still needs to be held accountable for the fact that we have a significantly dwindling number of financial advisers in this country. Part of the concern we have is that lack of financial advisers, which means that many people are not able to access financial advice right now.

That is incredibly challenging given that, firstly, we have a baby boomer community that is retiring and needs that financial advice for their planning and, secondly, so many Australians are struggling with the cost of living right now and actually need that advice to make the right decisions as they try and manage their complicated finances. Many people are losing businesses. This is the time when we need quality financial advice. The government has not moved fast enough and now seems to have taken missteps in its moves in relation to quality of financial advice. The government needs to do better in this area.

Finally, I would like to raise a concern with this omnibus bill and omnibus bills more generally. I want to put on the record my extreme frustration at the government rolling together disparate pieces of unconnected legislation in omnibus bills such as these. It makes no sense that changes to the location tax offset are bundled into the same bill as laws regarding capital allowances for mining and prospecting, as well as changes to implement the recommendations from the Quality of Advice Review. Putting these disparate measures together undermines the ability of the parliament to consider different policies on their merits and can potentially lead to important changes being delayed or inadequately considered by members of this House.

It is a worrying trend from this government. The worst example of this was a recent bundling together of changes to the PRRT and the response to the PwC tax scandal. They had nothing to do with each other, but there was a political reason to put those together. The government said in May 2022 that it was committed to better parliamentary process. I urge them to live up to that commitment and allow the parliament to debate different policy measures on their merits rather than present large omnibus bills combining disparate and unrelated measures.

Andrew Wilkie (Clark, Independent) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time. To this the honourable member for Petrie has moved, as an amendment, that all words after 'That' be omitted with a view to substituting other words. The question now is that the amendment be agreed to.

Question unresolved.

As it is necessary to resolve this question to enable further questions to be considered in relation to this bill, in accordance with standing order 195 the bill will be returned to the House for further consideration.