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

My question is to the still Acting Assistant Treasurer, Senator Cormann. Is the Acting Assistant Treasurer aware of the statements made at the most recent estimates by ASIC Senior Executive Leader Greg Kirk that an ASIC assessment of financial advice found, 'about 20 per cent of the advice was of very poor quality or legally inappropriate'? Minister, won't winding back the future of financial advice reforms leave most small investors vulnerable to financial advice that is not in the best interest of consumers?

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

I thank Senator Dastyari for that question. The answer to the final part of that question is, no. Of course, in accordance with the improvements to our financial advice laws that we implemented from 1 July 2014, we are keeping all of the important consumer protections that matter. We are keeping the requirement for advisers to act in the best interest of their clients and we are keeping the ban on conflicted remuneration.

ASIC has been pointing out very clearly why it is so important that ASIC conducts that sort of work. There is no doubt that historically we have had issues in this space in Australia that needed to be addressed. But guess what? Not even the strictest, most stringent, toughest regulatory arrangements are going to help in lifting professional, ethical and educational standards. We need the industry itself to provide leadership in relation to this.

Opposition Senators:

Opposition senators interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Order on my left! Senator Cormann, I have just paused the clock. We will not proceed until we have silence on my left. Senator Cormann, you have the call.

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

Good financial advisers provide an important service to Australians saving for their retirement or managing financial risks through life and help people with their financial health and well-being. They are dealing with other people's money, which is why there ought to be an appropriately robust regulatory framework in place which is not only robust but also efficient and which does not impose unnecessary costs that push up the cost of advice and puts access to high-quality advice beyond reach for too many people across Australia.

What we are about is ensuring that we continue to work with the industry around lifting professional, educational and ethical standards and making sure that the consumer protection requirements that matter are actually enshrined in our regulations and in our legislation. Not every bit of red tape is good for consumers. Where red tape pushes up the cost of advice without actually leading to proportionate improvements in consumer protections, it is actually bad for consumers.

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

Mr President, I ask a supplementary question. Is the minister also aware that ASIC has found 'there is an industry wide problem of very poor advice, including problems of conflict of interest'? Given that there is an industry-wide problem of poor quality advice, did the still Acting Assistant Treasurer have any regard to ASIC's concerns when he made regulations winding back the FoFA reforms?

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

I reject the premise of that question. We are not winding back the FoFA reforms. We are keeping the consumer protection requirements that matter. We are keeping the requirements for advisers to act in the best interest of clients. We are keeping the ban on conflicted remuneration. However often the Labor Party continues to repeat an inaccurate assertion, it does not make it true. Is everything perfect out there? No, it is not. Do we have to continue to work hard to lift professional, ethical and educational standards? Do we need to ensure that we weed the bad apples out of this industry? Of course we do, and we are continuing to do this work. But guess what? Tying up small business financial advisers in red tape by doing special deals for vested interests, industry super funds, which are close to the heart of the union movement, is not the way to achieve it. The previous government was guided by the vested interests of its friends in the union movement, not by the public interest.

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

Mr President, I ask a further supplementary question. Given that ASIC has also said that the current FoFA reforms 'should go a considerable way in improving the long-term quality of advice provided to investors', won't the government's removal of important protections leave consumers vulnerable to dodgy financial advice? Minister, if you are so proud of your regulations, why won't you right here, right now, table them? We will give you leave.

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

Thank you very much, Senator Dastyari. The improvements that we have made to our financial advice laws will help restore the balance between appropriate levels of consumer protections while making sure that access to high-quality advice that people can trust remains affordable. Of course, in relation to tabling the regulations, we will do the exact same thing that the previous government did in these circumstances: we will comply with all of the rules, all of the procedures and all of the legal requirements when it comes to the tabling of the relevant regulations.

I look forward to the opportunity of talking to my friends in the Palmer United Party, talking to my friends Senator Day and Senator Leyonhjelm, to make sure that everybody understands exactly what we are doing and what we are not doing. Senators on the crossbench—and we of course warmly welcome them to this chamber—have been on the receiving end of a lot of dishonest misinformation. They have been on the receiving end of a lot of vested interests pushed by the Labor Party. I will ensure that the rules and procedures that are in the law are complied with. (Time expired)