QAR bill in long line to Senate, casting doubt on adoption timeline

When Andrew Leigh, Assistant Minister for Competition, Charities and Treasury, tabled the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 last Wednesday, it marked the introduction of the first tranche of the government’s response to the Quality of Advice Review (QAR).

“These amendments support improved access to affordable financial advice for millions of Australians by cutting onerous red tape that adds to the cost of advice with no benefit to consumers,” Leigh said last week.

X

Continue to Website

However, the speed at which these changes will be realised is still unclear, with the bill introduced to Parliament just a day ahead of a lengthy break in sitting days and referred to the Senate economics legislation committee for inquiry and report by 20 June 2024.

Parliament is now on hiatus until the federal budget, with both houses scheduled to convene on 14 May. However, given that week will be focused on budget measures, the QAR bill is unlikely to surface in discussions until late May or early June.

As for its referral to the Senate economics committee, ifa understands that the bill can pass the House of Representatives even before the committee report is finalised. So, the best-case scenario is that the committee, which operates independently from parliamentary sitting days, could have the report ready for the Senate in the final week of June.

But even if this tight schedule is followed, Financial Advice Association Australia’s (FAAA) general manager of policy advocacy and standards, Phil Anderson, believes the bill won’t be adopted before the end of this financial year.

“Best case scenario is it gets passed in the House in the sitting weeks that we have available in May or the first week of June, then two weeks later the report in the Senate economics committee, it could then get passed in the following two sitting weeks before 4 July. That’s the best case,” Anderson said.

He did note, however, that while the financial advice profession is focused on the main part of the bill, “this bill has other stuff in it” too.

Also included are measures ranging from amendments to the general anti-avoidance provisions in the Petroleum Resource Rent Tax Assessment Act through to changes to location offset and producer tax offset for films.

As Leigh put it in Parliament, the bill contains “six schedules which range from red tape to red carpet”.

While it is not unusual for bills to combine a range of different measures, it opens up the possibility of further delay that is entirely unrelated to the QAR legislation itself if one of the many schedules of the bill are unexpectedly contentious.

Another bill that was introduced on the same day as the QAR bill, the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, has also been referred to the Senate economics legislation committee.

However, this bill has been earmarked for inquiry and report by 30 April 2024 – almost two full months ahead of the QAR legislation.

Following the release of the first draft legislation in November 2023, Senator Andrew Bragg, who serves as deputy chair of the Senate economics legislation committee, highlighted the likelihood there would not be any major changes before the federal election.

“Releasing a draft bill at this stage of the term means there will likely be no substantive financial advice reform passed in the life of this Parliament,” he said.

“If Labor was serious about cutting red tape from financial advice, they would prioritise implementing the recommendations of the Levy review, in full.”

While there has been considerably more announced since these comments, with Financial Services Minister Stephen Jones announcing the remaining QAR measure in December last year, there is yet to be any draft legislation released for this tranche.

Late last year, Ben Marshan, the principal at Ben Marshan Consulting, also said that the final legislation may not be in place before the next federal election.

“I’m not a betting man, but if I were to put money on it, I would say we’re looking at July 2025, maybe, and it could be 12 months from there before a lot of this is live,” Marshan said on the Challenge the Standard in Financial Advice podcast.

“I would say that it’s going to take 12 to 18 months from here for most of [the recommendations] to be consulted on and drafted into legislation,” he added.

“It is then going to go through a parliamentary process, which is going to take six months, and it’s then going to take 12 to 18 months after it’s passed Parliament to actually become the new law, and the new advice process.”