Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Acting Assistant Treasurer, Senator Cormann. I refer the minister to comments from the Council on Ageing that abolishing the requirement for financial advisers to act in the best interests of their clients 'simply weakens protections and the recourse for consumers against dodgy advisers.' Why is the government putting Australia's retirees and their incomes at risk by proceeding with these retrograde changes?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Bishop for that question. If I may say so, I do not accept the premise of the question. Senator Bishop is perpetuating an absolute falsehood. The government is not proposing to get rid of the best interest duty. The government is not proposing to remove the requirement for financial advisers to act in the best interests of their clients. In fact, that requirement is now and will continue to be in section 691B(1) of the relevant future of financial advice laws. In the second part of that particular section, there is a checklist of the things that an adviser has to comply with in order to satisfy that particular best interest duty. It involves making sure that you are across the subject matter, that you are identifying all of the relevant facts such as the objectives of the client, the financial situation of the client and the relevant circumstances. The adviser has to make a judgement on whether or not they are qualified to provide the advice, or they can refuse to provide the advice or decline to provide the advice if they are not qualified to do so—and so on. All of those requirements will remain.

What we have said is that the additional catch-all, open-ended requirement that Labor had added at the bottom of the list—that the adviser would be required to do anything else, take any other reasonable step in order to fulfil the best interest duty—was too open-ended; it provided too much uncertainty for consumers and for financial advisers about how this particular best interest duty would operate. Too much uncertainty means too much additional cost, which means that seniors across Australia would have to pay more for advice than they otherwise would have to, and we want seniors to have access to affordable, high-quality advice they can trust.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I refer to Mr Kohler's summary of the minister's position on the future of financial advice changes. He said: 'He is committed to the commitment of not committing the previous commitment of removing the general best-interest duties and sales commissions on general advice.' Minister, isn't Mr Kohler correct?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

No.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

Methinks someone has commitment problems over there.

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

Senator Bishop, a question.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I refer the minister to his statement earlier this week when he promised to consult in good faith with stakeholders on the government's financial advice retrograde changes whilst remaining committed to implementing them. Minister, why are you now acting in bad faith?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I hesitate to do this, but let me say: I reject the premise of the question. This government remains committed to improving the financial advice laws in Australia in order to ensure that we restore the right balance between appropriate levels of consumer protection and ensuring that access to high-quality advice that people can trust remains affordable.

There has been a lot of misinformation and a lot of confusion created by people with a vested interest to create that confusion. We want to ensure that people understand what we are actually proposing to do rather than what people perceive we are doing. Of course, the misrepresentations that Senator Bishop has used as a foundation for his questions is just another example of that.

If there are ways that we can better achieve the policy objectives that we stated in the lead-up to the last election by ensuring more precise language in the regulations, of course we will take those propositions on board. That is the usual process. (Time expired)