Joe Bullock (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, may I add my voice to that of Senator Reynolds in congratulating you on your election. My question is to the Acting Assistant Treasurer, Senator Cormann. I refer to the coalition of consumer advocacy groups—Choice, Council on the Ageing, National Seniors, who are with us here today in parliament—seeking to support the future of financial advice reforms. I also refer to the comments by the CEO of Choice, Alan Kirkland, who said:

When people receive financial advice that is driven by sales incentives instead of responsibility, they risk losing everything.

Minister, is Choice right?

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

I also congratulate Senator Bullock on his first question in this chamber. It is a real privilege that his first question is, indeed, addressed to me. The Western Australians in this chamber are having a very active question time today.

Opposition Senators:

Opposition senators interjecting—

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

Order on my left!

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

What I would say in response to Senator Bullock's question is that this government absolutely supports the consumer protections that matter to consumers. What we do not support is the additional unnecessary red tape, which pushes up the cost of advice for consumers and which was imposed on consumers and on small-business financial advisers at the behest of union-dominated industry funds. In all of the submissions to the Ripoll inquiry, which looked at Australian financial products and services, there was only one submission that recommended, for example, this requirement that clients of financial advisers should keep re-signing contracts to their advisers on a regular basis. And guess who that was? Guess who made that recommendation out of more than 400 submissions? It was Industry Super Australia. And guess what? After Industry Super Australia was successful in convincing Minister Shorten to impose that additional bit of red tape, guess what else they negotiated?

Opposition senators interjecting—

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

Senator Wong! Senator Cameron! Order on my left.

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

They negotiated a carve-out for themselves from the exact same requirement. Small business financial advisers have to comply with a bit of red tape that was imposed on small business financial advisers at the behest of industry super, and industry super gets themselves a carve-out from that exact same requirement so that they do not have to comply with it. They are providing advice, general and personal advice; they are charging for that advice without disclosing how much they are charging; they are not allowing people to opt out of that advice and they are not required to impose opt-in. What we are saying is cut the red tape that is unnecessary, keep the consumer protections that matter, keep the requirement to act in the best interests of the client, keep the ban on conflicted remuneration— (Time expired)

Joe Bullock (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I refer to comments this morning by Naomi Helpern, one of the victims of the Timbercorp collapse, who said, 'We know of about 300 people who are poised to lose their homes. Many more will go bankrupt and others will be left in crippling lifelong debt. And that is why it is really important that these dilutions to the FoFA reforms are disallowed.' Minister, is Naomi Helpern right?

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

I feel for this lady and I feel for any victim of bad financial advice. But guess what? You can impose as much red tape as you like. That is not going to prevent crooks from being crooks. We have to ensure that we have a robust but efficient regulatory system in place. We have to ensure that we have a system where people can have access to high-quality financial advice they can trust and which is affordable. We have to take action whenever things happen that should not happen. We have to make sure that we fix problems as they emerge. Even the toughest bit of red tape is not going to stop somebody bad from doing something bad. That is the big lie that the Labor Party is propagating. They are trying to use the cover of these sorts of events to essentially— (Time expired)

Joe Bullock (WA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Given the overwhelming opposition to the government's plans to water down the reforms by consumer groups and victims of financial advisers, does the minister agree that these regulations have left customers more and not less vulnerable to dodgy financial advice?

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

No, Senator Bullock, I do not agree with that. The government is keeping all of the consumer protections that matter. After things like the Storm Financial collapse, after some of the events that Senator Bullock is talking about, there was actually a bipartisan inquiry which was chaired by Mr Ripoll—a good man and now the shadow minister for financial services, but a good man nevertheless. It was a bipartisan committee with a bipartisan set of recommendations. We supported all of the recommendations that came out of that inquiry. But Mr Shorten, as the Minister for Financial Services in the last Labor government, thought that he should go a couple of steps further. He thought that he should go further than what was recommended by the Ripoll Inquiry because he was being pushed into doing so by the vested interests of industry super funds. This has got nothing to do with trying to prevent further victims of bad financial advice. We are keeping the improvements that matter. We are keeping the requirement to act in the best interests of clients. We are keeping the ban on conflicted remunerations. What we are getting rid of is all the bad red tape which does not make a difference. (Time expired)