During a Senate estimates hearing on Wednesday, Liberal senator Andrew Bragg pushed Treasury for a timeline on when the government would release the next stage of Delivering Better Financial Outcomes (DBFO) legislation.
Continuing the opposition’s method of keeping a running tally of how long it has been since Michelle Levy delivered the Quality of Advice Review final report to the government, Bragg said: “I think it’s now 700 days since the review was given to the government. When will the second tranche be seen?”
Responding to the question, Andre Moore, assistant secretary of the advice and investment branch, stated that Treasury is in the “legislation development phase right now”.
“The assistant treasurer indicated that he wanted to progress the bill in this term of Parliament. We’re continuing to work to those time frames,” Moore said.
He added that the next stage of the process is for an exposure draft legislation and that Treasury is “working on developing that legislation”, however, the timing for release of the draft “ultimately will be a decision of the government and the minister.
“I don’t have a time frame for that at the moment,” Moore said, adding that they “don’t have a complete draft”.
Given the proximity of the upcoming federal election, Bragg said the exposure draft would “have to happen pretty soon, wouldn’t it, If you’re going to meet [the deadline of] this Parliament”.
Moore responded: “It would have to happen in the coming, you know, period.”
“Fantastic, clear as mud,” Bragg retorted.
Following Liberal MP Bert van Manen introducing a financial advice private member’s bill on Monday, a spokesperson for Financial Services Minister Stephen Jones told ifa the next package of reforms is on the way but also declined to provide a timeline.
“The government is drafting the next tranche of reforms for introduction which will cut red tape on financial advisers, including by streamlining statements of advice, removing the safe harbour steps and modernising the best interests duty,” the spokesperson said.
“The government’s reforms are a package which will reform the financial advice framework as a whole. It will provide certainty to stakeholders and better affordability for consumers without compromising quality.”
This is largely in line with the minister’s statements last week at the AFR Super and Wealth Summit, signalling that it would be introduced before the country heads to the polls.
“We have delivered the first tranche of reforms, and the next tranche of reforms is being drafted and prepared for introduction,” he said at the time.
“In this tranche of reforms, we will modernise the best interests duty and remove the safe harbour steps. We will reform statements of advice so that they are actually usable by the consumer who paid for it to make informed decisions.
“And we will create a new class of adviser who will be able to provide simple and safe advice. Advice will be safe – so that we protect Australians from bad advice. Advice will be helpful – so that it is useful and fit for purpose. And advice will be quality – so that it delivers the best outcomes for Australians.”
According to Phil Anderson, general manager of policy, advocacy and standards at the Financial Advice Association Australia (FAAA), the minister’s statements suggest it could be “closer than we had anticipated”.
“We’ve obviously been desperately waiting for this for a long time. I think the statement of last week and his earlier commitment on the day that DBFO tranche one was passed was that we would see draft legislation by the end of this year,” Anderson told ifa.
“I think you would normally expect that that won’t be any later than, say, the end of the first week of December. So, we’re now into the last few weeks of when it might be likely to come out.”
Non-disclosure agreements
Senator Bragg also took aim at Treasury’s use of non-disclosure agreements during its consultation process on DBFO, questioning Moore on how many have been used and who the department is “consulting with in secret”.
“We’ve consulted confidentially with the full spectrum of stakeholders that are heavily engaged in the development of this legislation,” the assistant secretary said.
However, he took on notice questions around how many were signed, how many super funds were consulted, and whether Cbus specifically was involved in the process, saying he “can’t recall”.
“All right, so the position of the department is that you’re trying to work the minister’s commitment of doing it in this Parliament?” Bragg said.
“Yes. So, as with all legislation, we work to the government’s priorities,” Moore responded.
“And you’ve got non-disclosure agreements, and you’ve got a bill coming soon, we hope,” Bragg finished.
In the words of Sir Humphrey Appleby- “Well, Minister, as long as you are not asking me to resort to crude generalizations and vulgar over-simplifications such as a simple yes or no, I shall do my utmost to oblige”……
“Simple and SAFE advice.”
Hang on, that’s a new qualifier! What does Jones mean by “safe”. Safe for who? The insurers and industry fund trustees dolling out out general advice to uninformed and uneducated policyholders and fund members?
They will know what is “safe”, at least for them.
There is no such thing as “safe” advice in financial services – there is ALWAYS a risk.
As in life in general, it’s well-known that occasionally some strategies and appliances designed to keep things “safe” occasionally fail, with long-term consequences, and liabilities. Sounds like the rhythm method to me
Watching the Public Servants give answers in these hearing is entertaining – they always seem to be “clear as mud”.
Alp have only consulted with useless boffin in Treasury who littered the first stage, which contained basically no help for Ifa, with errors. In addition to super funds and super consumers Australia who the government formed and fu ded so completely bias. Hence the nda the list of culprits to bastardise the qoar is embarrassing even for the alp, which is saying something. VOTE THEM OUT
Unlikely to be errors. Treasury and ASIC have a long history of sabotaging legislation and regulation; most of which had a sensible and reasonable intent behind it, only for the outcome to be horrible for us.
Bravo Senator Bragg for highlighting this Governments inability to deliver on its promises in a clear and transparent manner.
Too bad he wants super to go towards puffing up house prices even further.
Are you saying that Superannuation Funds should NOT purchase property in the future?
I guess reducing HECS debt will have the same effect?
Yeah, just let industry super buy all the property hey? Keep the ponzi scheme of high rise CBD buildings going.