Conaghan accuses government of burying MIS review, demands answers

Speaking in Parliament last week, Conaghan pressed the Treasurer to “release the review, put the facts on the table and address this issue directly for Australians”.

Originally announced as part of the 2022 federal budget, Treasury was tasked with reviewing the MIS regulatory framework in March 2023.

According to then financial services minister Stephen Jones, the review was intended to assess whether the regulatory framework was fit for purpose, identify gaps, and consider enhancements to better protect investors from undue financial risk.

“Put simply, the rules around managed investment schemes haven’t been looked at in over 20 years. And over that period, we’ve seen a number of very high-profile collapses,” Jones said at the time.

“We saw Trio Capital, we saw Timbercorp, and more recently, the Sterling Income Trust. And those have been hugely painful for investors, they lost millions. Now we know that investments carry varying degrees of risk, we need to get the balance right to make sure that we have incentives, but also appropriate consumer protections in place.

“So, we thought that after 20 years, it was worth having a look at the framework to make sure it’s still fit for purpose in 2024 and into the future.”

The consultation ran from August to end-September 2023, with findings originally due to be delivered to government in early 2024.

But that deadline came and went with little explanation.

Pressed in February 2024, Jones said the review was still ongoing, with Treasury “still looking into the things”.

Now, Conaghan is pressing for answers.

“Billions of dollars of everyday Australians’ retirement savings are now at risk, lost in the collapse of dodgy schemes like First Guardian and Shield, all of them so-called managed investment schemes,” he said last week.

“What were the recommendations? Could implementing those recommendations have protected these investors? Could they have protected hard-working Australians who have done the right thing and now have lost everything? We simply don’t know because this government has bizarrely buried its own report,” he said.

“The government should be providing answers to everyday Australians, but, once again, Labor are asleep at the wheel.”

Conaghan’s push for transparency comes as Liberal Senator Jane Hume, chair of the economics references committee, effectively scrapped the Dixon Advisory inquiry by declining to have it readopted.

Senator Pauline Hanson moved a motion in the Senate for an inquiry into the collapse of Dixon Advisory and its impact on the CSLR in September last year, with its approval welcomed by the financial advice sector.

The continual delays in progressing to hearings had previously caused the reporting date to be moved back four months from March to 28 July – which clearly signalled the inquiry would need to be closed down and then restarted.

However, there was a broad expectation that the inquiry would be picked back up, with FAAA general manager policy, advocacy and standards Phil Anderson noting last month that “the FAAA is now working closely with the financial services minister and the shadow minister to get the inquiry remounted”.

“The recent experience with Shield and First Guardian emphasises the importance of an inquiry into such matters.”