Zed Seselja (ACT, Liberal Party) Share this | Hansard source

I will. I will come back to that, but I did talk at the beginning of my speech about how I had heard it all. We talked about Ian Macdonald. Previously we heard from Senator Lambie, who is now, she says, on this issue leading a coalition of common sense. A coalition of common sense led by Senator Lambie! I would say to senators who are contemplating voting with Senator Lambie that a coalition of common sense led by Senator Lambie you have to be somewhat sceptical about.

I will mention in passing that I have a lot of time for Senator Madigan and Senator Xenophon but I think that their decision today, as crossbenchers, to vote to deny another crossbencher a question in question time was pretty disappointing, to say the least. It was pretty disappointing, because I am very sympathetic when I hear from the likes of Senator Madigan about how little time crossbenchers and Independents, in particular, get either for questions or for the debate of their legislation. For them to vote to deny one of their fellow crossbenchers today was very disappointing. If you look at it in the context of some of the discussions we have about giving them more time, it was particularly disappointing.

But let us go to what we are dealing with here in terms of certainty. What we have had is the Senate twice voting to approve these FoFA regulations, twice voting down the disallowance motions that have been moved by the Labor Party and by Senator Dastyari. The uncertainty that is caused by this sudden about-face and by this reneging on a deal by Senator Muir and by Senator Lambie is a particular concern to the coalition and I am sure will be a particular concern to many in the community, who will see that, even when a regulation is backed, it may not be backed in two months, or three months or six months. The very same regulation, with the very same composition of the Senate, on any given day—based on what we are hearing today from Senator Lambie and from Senator Muir—could be overturned. That creates a high degree of uncertainty.

Let's be clear about what this is. It is reneging on a deal. Senator Lambie and Senator Muir did a deal. Senator Muir, in fact, actually got some concessions for the deal that he made. On behalf of the Motoring Enthusiast Party he asked for some concessions, and these were agreed to by the government. The government was asked to give concessions in order to gain the support of Senator Lambie, Senator Muir and others to get the regulations through. The government honoured its part of the deal, and Senator Muir and Senator Lambie cannot be trusted to honour their part of the deal. They walk away. What is their word worth? What is a handshake worth from Senator Muir and Senator Lambie? I will be interested to hear from Senator Muir later on in the debate, because Senator Muir in particular asked for certain things to be done in return for his vote on this issue. They were done and, notwithstanding that, he is now flipping around. So I would be keen, I am sure other senators would be keen and I am sure that many in the community would be keen to know what exactly made him change his view.

It is interesting to look at one of the main claims made by the Labor Party and others in relation to this legislation—Senator Lambie talked about it, but Senator Cameron did not touch on any of the detail of what we are talking about here today—because, when it actually gets subjected to scrutiny, it is found to be false. I would not necessarily call the ABC's Fact Check an organisation that leans to the right. I would not say that Fact Check from the ABC is more likely to back the position of the coalition. I think that would be a stretch. The Fact Check from the ABC looked at some of the very claims we are debating today. The claim was—it was Chris Bowen saying it—that the government's changes to financial advice laws will bring back the type of commissions that encourage financial advisers to recommend risky investments. And the verdict of the Fact Check? Scaremongering was the verdict. The ABC Fact Check looked at these claims that we have been hearing from the Labor Party today and that we have been hearing from Senator Lambie—presumably backed by the likes of Senator Xenophon and others. The verdict on the claim that the government's proposed changes to financial advice laws will bring back the types of commissions that encourage financial advisers to recommend risky investments was that they will apply only to some forms of general advice. They do not bring back old-style commissions. The overall verdict is that this is scaremongering.

Let's be clear about what we are talking about. We are talking about scaremongering. Under the government's legislation, significant safeguards are in place—safeguards which have been outlined many times by Minister Cormann and others. We are hearing that the reason for the shift today by Senator Lambie—and by Senator Muir, presumably, although we do not know exactly why he is shifting—is these claims that even the ABC's Fact Check has found to be scaremongering. The safeguards are there. Let's go through some of those safeguards. The requirement for a financial adviser to act in the best interests of his or her client is enshrined in section 961B(1) of the Corporations Act. That remains in place and unchanged. There is no amendment. The current section 961B(2) outlines the steps an adviser may go through to show that he or she has satisfied the duty to act in the best interests of his or her client. The first six steps effectively remain unchanged. Let's go through those. They have to identify the subject matter of the advice sought, whether explicitly or implicitly. They have to identify the objectives, the financial situation and the needs of the client that would reasonably be considered as relevant to the advice sought on that subject matter.

They have to identify the objectives, the financial situation and the needs of the client that are disclosed to the adviser by the client; where it was reasonably apparent that information relating to the client’s relevant circumstances was incomplete or inaccurate, they have to make reasonable inquiries to obtain complete and accurate information. They need to assess whether he or she has the expertise required to provide the client advice on the subject matter sought and, if not, they must decline to provide the advice. If, in considering the subject matter of the advice sought, it would be reasonable to consider recommending a financial product, they need to conduct a reasonable investigation into the financial products that might achieve the objectives and meet the needs of the client that would reasonably be considered as relevant to advice on that subject matter. They need to assess the information gathered in the investigation and base all judgements in advising the client on the client’s relevant circumstances.

This is a comprehensive set of steps. If anyone claims—as Chris Bowen has, as Sam Dastyari has and as others on the crossbench have—that the government's changes will bring back the type of commissions that encourage financial advisers to recommend risky investments, the ABC's fact checker and many others say that is absolutely not true. It is scaremongering. There is a long list of safeguards there for people who are seeking financial advice. This is not about safeguards. This is about a special deal for one sector. It is about a special deal for industry super funds. Senator Wong can sigh all she likes, but those are the facts, because industry super funds get a different deal. Senator Cameron said in his contribution, 'What is wrong with having to opt in every couple of years?' What is wrong with it for industry super funds?

That is fundamental to this debate.

Senator Cormann interjecting—

That is right. Clients of industry super funds do not get those protections that Senator Cameron is arguing for. What apparently would be too much red tape for industry super funds is okay for small businesses. That is fundamental to this argument. It is fundamental to why they have made this judgement. They are not seeking to do what is in the best interests of clients. We have seen and heard just how comprehensive the set of safeguards is. What they are seeking to do is leave that competitive advantage for their mates.

We know why. I do need to respond to some of what was said earlier in the debate by Senator Cameron—and others—when he claimed it is about donations. If it is about donations, I think we should be looking to the other side: the CFMEU that funds the Labor Party and that funds the Greens—it is not just the Labor Party that receives significant funds from—