Sam Dastyari (NSW, Australian Labor Party) Share this | Hansard source

I rise to take note of answers by Senator Cormann. The government refuses to table its regulations and allow this place to properly debate the loopholes that it wants to introduce. It tries to bide its time to twist the arm of the new crossbench friends for just a few more days to soothe their concerns and try to convince them that this government is not going to roll back basic consumer protections. It tries to convince its crossbench friends that the Abbott government is not acting in the best interests of the big banks and in the interests of a handful of conmen, fraudsters, crooks and criminals who salivate at any opportunity to go back to the bad old days of financial advice when they could clip the ticket and get a blank cheque.

The acting Assistant Treasurer is in the chamber now. Just show us one consumer group that supports the gutting of the best interest duty, that taking consumer protections back to a lower standard than existed before FoFA was introduced is a good idea. The government is not just introducing nine separate loopholes to the ban on conflicted remuneration; it is also gutting the best interest duty. The FoFA laws, introduced by Labor, provided a checklist, an obligation to ensure financial advisers ask appropriate questions of their clients, to ensure that a reasonable adviser will exercise care, skill and objectivity in assessing the client's circumstances. Not content with this, the government will now allow financial advisers to limit the scope of advice to a specific bank's product, even if they know full well that, by doing so, they are taking the client's best interests for a stroll down the garden path. The new standard is that the advice no longer needs to be in the client's interest; it now only needs to be 'appropriate'. This proposal, first brought to the government in 2006, was rejected by the then Howard government because it was so obviously a loophole, an opportunity for those who want to cheat and con the system to find a way to give the appearance of giving proper, frank, fair financial advice when they know full well it is not in the interests of the consumers.

The minister likes to go on about people being in the pockets of other people. Let's be clear about this. In 2006, AMP received an enforceable undertaking in regard to this practice. This practice was used in the Timbercorp scandal, it was used by CBA financial planners, and now the government wants to legalise this loophole for banks and the financial advice industry. The minister, in different capacities in the past, has been a strong proponent of many of these kinds of reforms. He has spent a lot of time over the years talking to a lot of different groups that have been affected by this. I have the utmost respect for this minister given the amount of time he has spent carefully studying some of these matters in the past. But the reforms that are being proposed are not good for Australia, they are not good for Australian consumers and they are not good for the people who have felt the brunt of these scandals in the past. I urge the minister to reconsider what he is doing. If you are not prepared to do that, at least have the courage to table your own regulation in this place so we can have a debate about whether it should be disallowed.