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

My question is to the Assistant Treasurer.

Government Senators:

Government senators interjecting—

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

He asked for a policy question; I am giving him one!

John Hogg (President) Share this | Link to this | Hansard source

When there is silence on my right we will proceed! Order on my right! I remind you that Senator Dastyari is entitled to be heard in silence.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

We're trying to help him out, Mr President!

John Hogg (President) Share this | Link to this | Hansard source

Senator Macdonald, interjections are disorderly!

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

I refer to the Assistant Treasurer's Future of Financial Advice proposals to scrap conflicted remuneration provisions, reintroduce the worst aspects of trailing fees and remove the requirement for advice to be provided in the best interests of consumers. Minister, isn't Alan Kohler right when he says in today's Australian, in a full page advert, that your plan to remove some of the important parts of the Future of Financial Advice legislation is a case of 'wrong way, go back'?

Arthur Sinodinos (NSW, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

I thank the young senator from New South Wales for his policy question because debate on Future of Financial Advice is exactly something this chamber should be all about. Let me say I reject the assertions made by Mr Kohler today. I do not believe that we are winding back the consumer protection provisions. I do not believe, by clarifying the best interest duty, we are in any way derogating the obligation of financial advisers to act in the best interests of their customers, their clients, because it is enshrined in common law. It is enshrined in the Corporations Act as well as in the Future of Financial Advice reforms. No less an authority than the former Chief Justice of the High Court, Sir Anthony Mason, made that point at the recent national conference of the self-managed professionals association on the Gold Coast.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

It's enshrined in your DNA to give back to the big end of town!

Arthur Sinodinos (NSW, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

Senator Lines, it repays close reading. In relation to general advice, the point we have made all along is that there are circumstances where there was overreach by the legislation in terms of prohibiting the use of what is called conflicted remuneration for general advice. It was an unintended consequence because it would sweep up too many employees who otherwise were only just doing their day job of providing low-cost and factual advice on particular products or financial services.

As I have indicated, the industry is moving to a fee-for-service basis. This was, indeed, an initiative largely sponsored by the industry itself. We support that and this legislation will reinforce all of that. Thank you.

Government senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! Silence on my right! If you wish to debate this—

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

And just as—

John Hogg (President) Share this | Link to this | Hansard source

Order, Senator Lines!

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

Mr President, I ask a supplementary question. I refer the Assistant Treasurer to the government's regulation impact statement prepared by the Treasury. Why does this statement only assess the cost to business and ignore the impact on consumers? Minister, what will the cost be to consumers of new commission streams eating into their investments under the proposed changes?

Arthur Sinodinos (NSW, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

The benefit to consumers will be that financial advice will be both more accessible and more affordable—and there will be more of it available, including what is called scaled advice, which is very specific to a particular issue affecting a financial adviser. It is very important we understand that these costs are not a free lunch; they have to be passed on to consumers. By reducing those costs and promoting competition in the sector, we will promote lower fees and lower costs to consumers. More people will get access to affordable advice.

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

Mr President, I ask a further supplementary question. Assistant Treasurer, why is the government once again putting the interests of consumers last and removing provisions that were put in place to protect them?

Arthur Sinodinos (NSW, Liberal Party, Assistant Treasurer) Share this | Link to this | Hansard source

The changes we are making will help consumers. They will promote affordable and accessible advice. We are not removing their protections.