John Williams (NSW, National Party) Share this | Hansard source

I rise to make a contribution to this debate. There are many important issues in this debate, but there is one very important issue. We had a grandfathering clause in the change brought forward by Senator Cormann, who is sitting here in the chamber. What that grandfathering clause meant was that, when you had a financial advice business prior to 1 July 2013, you may well have been receiving commissions. There was nothing wrong with that. It was totally within the law.

When the FoFA started on 1 July 2013, that removed those commissions from these businesses, especially small businesses, that had a cash flow and had done everything right by the book. I will give you an analogy. It is a bit like exporting live cattle out of Darwin and having the government ban live export. You have lost your cash flow, you have lost the value of your property, you cannot sell what you grow on it and it destroys you financially. This is no different.

What Senator Dastyari and others have done here with this disallowance—if successful—will wipe out that grandfathering income for those small businesses. Mr Acting Deputy President Sterle, it would be like you buying a truck and signing a five-year contract, a good contract with a cash flow. Three years into it they just tear it up, and you walk away. You have lease payments on your rig and repairs to do—and your truck has lost its value and you have lost your contract. This is what is going to happen if this disallowance gets through.

I know people like Senator Cameron do not care about small business or their value—do not give a hoot about that.

I want say to people like Senator Xenophon—and Senator Xenophon, I hope you are listening in your office—Senator Lambie; Senator Madigan, and I am glad he is here, he comes from small business, a hardworking blacksmith; and Senator Ricky Muir, a timber cutter from small business: if you do not amend and reinstate part 28, 29, 31, 32, 33, 34 and 35 of those regulations to protect small businesses, you are going to destroy the value of those small businesses that have built that value through hard work and playing by the rules.

I believe that, when the former Labor government brought these FoFA rules in, they realised afterwards that they had it wrong; that they went too far. I believe there was a bipartisan verbal agreement to fix this—the grandfathering clauses—to protect the value and cash flow of those small businesses. However, we know the previous government lost government.

So now we have got Senator Dastyari backed up by those senators I mentioned—Senator Xenophon is from small business as a legal professional; as I said, Senator Madigan, a hardworking blacksmith—you would not get much tougher jobs than that; Senator Muir from the timber industry and a tough industry, especially with the Greens trying to strangle it at every post; and Senator Lambie. If you support this disallowance that has been put up in this way, you will destroy the value of those small businesses. You will destroy their cash flow, and they did it all legally.

I would hope that you will come forward, Senator Madigan, with amendments and you will talk to Senator Xenophon and the others. I would hope that those amendments would be supported by Senator Wong and those on the other side. I know many of them do not care about small business, but this is vital. If we make decisions in this place that destroy the cash flow and value of small business, then we should hang our heads in shame—that is the first point I want to make.

When it came to the regulation changes by our government, the scaremongering that went on to say the best interest test will be removed was simply wrong. Section 961B and 961J clearly stated that. We altered and tinkered with the catch-all clause 961B(2)(g) to prevent people from being sued everywhere.

The opt-in—of course the original inquiry chaired by Bernie Ripoll MP—was the suggestion of industry super funds. I see today out there in the corridors Robbie Campo and David Whitely from industry super funds with grins on their faces like a cat out of a dairy; they are very pleased that they have rounded up the troops to support their cause.

I want to read from Judith Sloan's story here: 'Links with industry superfunds are worth probing.'

Senator Wong interjecting—

Senator Wong perhaps does not want me to read this.