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A ‘sad development’ for financial advice

Finance minister Mathias Cormann has described Labor’s FOFA victory as “bad news for consumers and small business financial advisers”, vowing not to give up on the amendments entirely.

In a statement issued following the fateful vote in the Senate last night, Senator Cormann – who has been instrumental in establishing the Coalition’s FOFA policy in opposition and government – said the Senate’s decision was not in the “public interest”.

“By disallowing our FOFA improvements, the Senate tonight voted to increase the cost of financial advice and to lessen competition across the financial advice industry without improving consumer protections for Australians saving for their retirement,” Senator Cormann said.

The statement explained that the government will continue to seek passage of its amendments through the parliament, but that – should Labor’s original legislation be reinstated – an “appropriate transition” period will be put in place, naming the date of 1 July 2015.

“While tonight's vote is disappointing, the government remains committed to these reforms,” it said.

“We will continue to work to ensure we have a robust but also an efficient financial services regulatory system.”

Senator Cormann also said it was unfortunate that the financial advice industry has been caught up in internal party politics and scandal.

“This is a very sad development,” he said.

“The only reason we are having this debate…is that there is now manifestly a split within the Palmer United Party and a split between the Palmer United Party and Motoring Enthusiasts Party. That is why we are here for the third time.”

The minister described Labor’s parliamentary tactics yesterday as an “ambush” and criticised Senators Lambie and Muir for not keeping their word.

“I in good faith entered into a deal with Senator Muir and Senator Lambie – and acted on the points of that agreement – but when it came time for them to honour their side of the deal they walked away," Senator Cormann said.