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

I rise to speak on the motion before us. What we saw today was just extraordinary—once again, another day, another opportunity to table the FoFA obligations, and the minister once again refused to do so. I want to bring the Senate's attention to what actually had been agreed on by this Senate only hours earlier today, and that was 'That there be laid on the table by the Minister for Finance, no later than 1.50 pm on Thursday, 10 July 2014, the Corporations Amendment (Streamlining Future of Financial Advice ) Regulation 2014.' The Senate itself called on the minister to table these documents and he refused to do so.

The minister, in answer to a question to him today, showed a lack of understanding or appreciation of what processes had actually been undertaken. The simple fact is that these documents have been prepared for tabling, and it was the intrusion of Treasury officials to the Office of the Parliamentary Counsel that stopped them being tabled. The minister or somebody within the government has instructed that these documents not to be prepared for tabling. It is an incredible breach. Let us be clear: this is not about giving people an opportunity to understand them. The minister knows the will of the Senate on this issue. This is about delay, delay, delay. It is not as though the regulations he will not table are not significant. For example, part 7.7A2, 'Best interests duty—identifying objectives et cetera disclosed' says:

(1) This regulation:

(a) is made for paragraph 961B(5)(a) of the Act; and

(b) prescribes a step (the prescribed step) in substitution for the step mentioned in paragraph 961B(2)(a) of the Act;

What does that mean? That means that this is nothing other than a watering down of the best interests duty—a watering down of the protections that have been provided.

The minister repeatedly has said at different points in time that by watering down these reforms, by adopting his regulation, it will not return to commissions or sales incentives or conflicted remunerations. He said that those matters are not going to come back. Frankly, that is not the case at all.

There are nine separate ways that kickbacks have been reintroduced by this government: the general advice exemption, which allows people to be able to narrow the scope of advice to get around the bans on conflicted remuneration by allowing commissions on execution services, a loophole to keep commissions by having a different adviser execute or implement the advice that other advisers initially provided; by allowing banks to pay commissions on all basic banking products extending the already broad exemption for basic banking products so that it applies to all staff, including financial planning staff; and by permitting ongoing asset fees, indefinitely allowing them to continue. The list goes on and on.

What does this mean? It means the basic protections, the fundamental protections, that people had been provided through the initial Future of Financial Advice reforms are being stripped by these regulations. In light of recent discoveries, in light of a Senate committee report that outlines the sheer horror of what has gone on in some of these sectors, it is unconscionable that this government make the decision that now is the appropriate time to water down these reforms. It is not. There are too many stories of people being ripped off and it is wrong for the government to want to side with a handful of crooks, shonks and conmen, who have given the financial services industry a bad name and are salivating at the opportunity to go to bad old days of financial advice when the regulation was at a minimum and they were able to keep clipping the ticket and keep making a buck at the expense of the people they were there to serve.