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

My question is to the Acting Assistant Treasurer, Senator Cormann. I refer to the financial advice regulations that Labor tabled last Thursday, and I refer to comments by Mr Michael O'Neill, the CEO of National Seniors, that these changes 'clearly put big business ahead of consumers' and 'these regulations wind back vital consumer protections introduced after corporate collapses left thousands of elderly Australians destitute'. Minister, are National Seniors correct?

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

I thank Senator Dastyari for that question. As much as I hold National Seniors in very high regard as an organisation, they are wrong in relation to this. Our changes clearly do not do that. Our improvements to the future of financial advice laws maintain all of the consumer protections that matter. They maintain the requirement for advisers to act in the best interests of their clients. They keep the ban on conflicted remuneration in place, including in relation to general advice provided by bank employees in the context of product sales.

What we are doing is removing the unnecessary and costly red tape which pushed up the cost of advice, which was imposed by Labor at the behest of commercial vested interests; namely, the industry super funds. An example is the requirement for clients to re-sign contracts with their advisers on a regular basis, imposed on small business financial advisers but not imposed on Senator Dastyari's friends in the industry funds movements. Another example is the retrospective application of an additional annual fee disclosure requirement, which of course we agree with prospectively but not retrospectively.

Also, we happen to think that clients and their advisers should be able to agree the scope of the advice, which is why we have put beyond doubt the capacity of advisers and their clients to agree to the subject matter—which, incidentally, is also something that industry funds are able to do. In fact, under the special deal Mr Shorten did with Industry Super Australia, industry funds can provide advice, general and personal; they can charge for that advice and not disclose the charge for that advice and they are exempted from the opt-in requirement that applies to everybody else. It was a special deal that is completely inappropriate in the circumstances. We do not believe that Australia should be the world champion in financial services red tape. We think we need to have the right balance between appropriate consumer protection and access to affordable advice.

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

Mr President, I have a supplementary question. Minister, I also refer to comments by Mr Alan Kirkland, the CEO of consumer advocacy group CHOICE, who said:

Now more than ever, consumers need professional financial advice to help them save for their retirement, not advice distorted by hidden fees and advisers pushing products that don’t meet their needs.

Minister, now that you have already said National Seniors is incorrect, is CHOICE incorrect too? Is every other consumer group in this country also wrong, or are you wrong, Minister?

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

I actually agree 100 per cent with the quote that Senator Dastyari just read out. Consumers do need access to professional advice. And guess what? Not every bit of red tape is good for consumers. Not every bit of red tape actually helps to ensure that consumers can have access to professional advice. What we need is a robust but efficient regulatory system in which people across Australia saving for their retirement, managing their retirement or managing financial risks through life, can access high-quality—

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

No-one believes you.

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

Senator Dastyari, you have asked your question.

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

advice they can trust but which is also affordable. Of course, the regulatory system ought to be competitively neutral as well as being robust and efficient. We are making some balanced changes in the public interest. You made changes that were driven by the vested commercial interests of union funds. We are focused on the public interest. (Time expired)

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

Mr President, I have a further supplementary question. Can the minister name a single consumer group—that is, a group that looks after the interests of those who have been the victim of corporate collapses—that supports the changes that the minister has made to water down the FoFA reforms? Just name one, single group that is a consumer advocate that supports you?

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

I completely reject the premise of that question. We are not watering down consumer protections; we are keeping all of the consumer protections that matter and we are making sure that consumers can have access to advice which is affordable and which they can trust.

Senator Wong interjecting—

We will be able to have a very long debate about these things—no doubt, very soon—if you do indeed follow through with what you flagged last week.