Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

Thank you. Firstly I completely reject the assertion that the government is bringing back conflicted remuneration. We are not.

After the collapse of Storm Financial and various other events, such as the one Senator Bishop mentions, there was a bipartisan parliamentary inquiry, colloquially referred to as the 'Ripoll inquiry'. It was a very good inquiry and indeed the recommendations that came out of that inquiry received bipartisan support. Principally, the recommendations were that there should be a fiduciary best-interest duty imposed on financial advisers, something we support; that there should be additional disclosure requirements, something we support; and that there should not be conflicted remuneration for financial advisers, something we support and something we maintain.

The mistake Labor make is that, under the cover of these sorts of events, they have tried to shove in a whole range of competition-distorting initiatives that they have long had in their bottom drawer, imposing unnecessary additional red tape, pushing up the cost of advice beyond what was appropriate to improve consumer protection arrangements. Minister Bowen and then Minister Shorten pursued a naked commercial vested-interest agenda for their friends in the union-dominated industry funds.

The truth of the matter is that when you try and fix a problem you need to make sure that whatever you do actually makes things better and not just more complex and more expensive. You need to make sure that the changes you make are proportionate and that the costs they impose are proportionate to the additional improvements they deliver. Minister Shorten cannot have been very confident of his changes, because Labor had a regulatory impact assessment requirement—a cost-benefit impact requirement—and guess what: Minister Shorten sought and received from then Prime Minister Gillard an exemption from that process, because he knew that it would fail the cost-benefit analysis that was a requirement of their own government.