The draft legislation for the second tranche of the government’s Delivering Better Financial Outcomes (DBFO) reforms has been significantly delayed, with behind-the-scenes discussions ongoing, but there’s still no date set for when the minister might announce the start of a formal consultation process.
Speaking to ifa on Tuesday, the CEO of the Financial Advice Association Australia (FAAA) expressed optimism that the draft legislation will be released soon, based on the minister’s earlier hints that it would be open for consultation within this calendar year.
“We’re hoping it’s soon, but we don’t have a date yet,” Sarah Abood said.
Despite the looming federal election, the FAAA CEO remains optimistic that tranche two will make it to Parliament before Australians head to the polls, she told ifa.
“We’d like it to, it’s certainly looking tight. The sooner we kick that process off the better, in our view,” Abood said.
“We would like to see legislation go through in the current term of government, but we are running out of time. Everyone is keeping a close eye on their Treasury notifications,” she added.
Reflecting on Minister for Financial Services Stephen Jones’ recent shift in focus towards tackling scams – an initiative welcomed by the advice community but criticised for potentially delaying DBFO reform – Abood acknowledged that while scams are indeed a significant issue, she hopes DBFO isn’t being sidelined.
“Scams are uncontroversial, no one is going to say, ‘I think you’re being a bit too hard on scammers, you have to lighten up’. So, it’s more straightforward in policy terms,” Abood said.
“I certainly would hope that that focus wouldn’t come at the expense of needing to solve the issues in the advice profession, which the minister has said on many occasions he understands and feels they are important.”
Last week, speaking on a BT webinar, head of financial literacy and advocacy Bryan Ashenden said that despite the delay in delivering draft legislation for the second tranche of the DBFO reforms, ongoing consultations could be a net positive.
“We have seen for a couple of months now, and still ongoing right now, targeted consultation on these measures. This is targeted consultation, sort of pre-drafting,” Ashenden said.
“This involves Treasury meeting with various industry groups, industry associations, some licensees, trustees and so on, talking about, ‘Well, here’s what the intent of the Quality of Advice Review recommendations are, and how do we draft the legislation to make this point?’
“Perhaps there’s more focus on that targeted consultation at the moment, knowing what happened with charge one, and the level of discussion and disagreement over the physical drafting that initially came through.”
The delivery timeline for tranche two was pushed back essentially as soon as the first DBFO bill had passed through Parliament, with Minister Stephen Jones signalling that the next round was further away than some in the advice sector might like.
Jones simply offered the vague description that it would be “developed over the second half of the year”.
