The Treasury Laws Amendment (Putting Consumers First – Establishment of the Australian Financial Complaints Authority) Bill was agreed to by the Senate on Wednesday (6 December) and introduced and read for the first time in the House of Representatives yesterday (7 December).
AFCA aims to replace the existing Financial Ombudsman Service, Credit and Investments Ombudsman and the Superannuation Complaints Tribunal and be a “one-stop shop” for dispute resolution.
It will commence operation in the second half of 2018.
Speaking after the legislation passed the Senate, the Minister for Revenue and Financial Services, Kelly O’Dwyer said that the new body would “give significantly more consumers and small businesses access to free, fast and binding dispute resolution”.
She commented: “AFCA is a landmark reform that will overhaul how financial disputes are dealt with in Australia. It will operate under significantly higher monetary limits and compensation caps. This will provide considerably greater access to redress for consumers and small businesses, and in particular, farmers, who will have access to up to $2 million in compensation under the new AFCA scheme.”
The bill was passed with a number of minor amendments moved by the government in relation to the handling of superannuation disputes, to review AFCA’s operations after a period of 18 months from its commencement, and to enshrine in legislation the requirement that the AFCA chair be independent.
These changes respond to key issues raised by stakeholders in submissions to the Senate Economics Legislation Committee and crossbench Senators.
“I’d like to thank Professor Ian Ramsay, Ms Julie Abramson and Mr Alan Kirkland for their work on the External Dispute Resolution review, and all stakeholders who played a constructive role in the development and passage of these important reforms,” Ms O’Dwyer said.
“I encourage all interested parties to continue to engage with Dr Edey and the Transition Team who are overseeing the transition from the existing schemes to AFCA. Continued engagement will ensure that AFCA will provide better outcomes for consumers, while being accountable to all stakeholders.”
As well as AFCA, two housing affordability measures – the First Home Super Saver Scheme and the Reducing Pressure on Housing Affordability Measures – also passed the Senate.
The bills, which will allow first home buyers to make voluntary contributions of up to $15,000 per year and $30,000 in total into their superannuation account, and seniors to make contributions of up to $300,000 from the proceeds of selling their home into their super accounts, will come into effect from 1 July 2018.
The bills will now move to the House of Representatives for final passage.
There’s another cost impost on the advice community. Up go PI premiums yet again with higher compensation limits. Won’t be long before there is nobody around to refer to AFCA