Nick Xenophon (SA, Independent) Share this | Hansard source

I indicate that I will be confining my remarks to under four minutes for reasons of procedural fairness the Finance Minister should at least state the government's case in respect of this disallowance motion. I think that is the fair thing to do.

I will be supporting the disallowance of these regulations for two reasons. Firstly, I do not support the government's proposed changes to the Future of Financial Advice measures introduced by the previous government. Secondly, significant concerns have been raised by the Scrutiny of Bills Committee and the Senate Standing Committee on Regulations and Ordinances relating to the measures contained in the regulations and whether they be more appropriately established in legislation.

On the first point, I want to make it very clear that I do not support the government's moves in relation to FoFA. It is my view that the government's bill is a step backwards in terms of consumer protection and is too focused on getting industry what it wants without balancing out consumer interest. As both committees have noted, the expenditure statement for this instrument justifies making the FoFA amendments through regulation rather than legislation to provide certainty to industry as soon as possible. That is what it says. Thankfully, neither committee has accepted this as a valid reason to deal with such issues through regulation instead of legislation. To me this is a pretty poor justification for these regulations which makes it very clear that, I fear, the government has been putting industry certainty ahead of consumer protection. I suggest that that the financial services industry is big enough and ugly enough to look after itself and that consumers are the ones government should be providing with certainty and adequate protections.

I agree with both committees and I believe it is not appropriate for the government to use regulatory-making powers to introduce these measures. I also do not support the measures themselves. I believe they are a significant step backwards in terms of scrutiny, accountability and consumer protection. This is particularly true in relation to the modifications of the best-interest duty and the payment of commissions. I look forward to discussing my concerns in greater detail when this bill is debated, but in essence I cannot support these changes. For both of these reasons—the provisions themselves and the suitability of establishing them in regulation—I will be supporting this disallowance.

Finally, I plead with my crossbench colleagues—the Palmer United Party senators and Senator Muir from the Motoring Enthusiasts Party—to support this disallowance and to consider deferring supporting any legislative changes to the FoFA legislation until we hear further from David Murray and his financial services inquiry and until we see what ASIC says in a report that is due to be tabled and released, I understand, within the next few days on the life insurance industry that crosses over some of these issues about disclosure. There is some common ground there, and we need to heed that. I ask that we deal with this cautiously and expeditiously, and that is why I support the disallowance of these regulations. I think that is the prudent and cautious step to take and, having spoken for three minutes and 20 seconds, I think it is fair for the Finance Minister to have a say, but, of course, that is your call, Madam Acting Deputy President.