The Senate economics legislation committee has released its report into the first Delivering Better Financial Outcomes (DBFO) bill, after requesting an additional day on Thursday to finalise it.
“The committee notes the intent of the government is to ensure that financial advice can be paid from superannuation in accordance with trustees discharging their general obligations that are designed to protect the retirement incomes of members,” the report said.
“The committee supports this intent and is reassured by evidence that the status quo can continue, supported by greater legal clarity, and that trustees would not be obliged to check every piece of financial advice as the bill simply codifies current practice into law.
“In particular, the committee draws attention to the supplementary explanatory memorandum which states ‘Consistent with meeting their obligations under the current 99FA, trustees should have in place robust assurance processes to satisfy themselves that advice deductions from members’ superannuation accounts comply with their legal obligations. This may include random or risk-based sampling of advice’.”
The committee noted industry views that the “primary law should be more prescriptive in outlining steps that trustees must take to meet their obligations”.
“However, the committee is convinced by evidence from ASIC and Treasury that a prescriptive approach is likely to be impractical given the diversity within the superannuation industry,” the report said.
In its only recommendation, it said: “The committee recommends that the bill be passed.”
Speaking at an event on Thursday morning, Financial Advice Association Australia (FAAA) general manager policy, advocacy and standards Phil Anderson, said he did not expect last week’s Senate economics hearing to have an impact on how the government views the DBFO bill.
While the government recently amended the bill’s explanatory memorandum (EM) to clarify that trustees are not expected to rigorously review each statement of advice (SOA), professionals and legal experts argue that these changes to the EM are insufficient and that the legislation itself needs to be amended.
Also on Thursday, shadow treasurer Angus Taylor and shadow financial services minister Luke Howarth addressed a letter to Financial Services Minister Stephen Jones to demand section 99FA be removed from the first DBFO bill.
“As witnesses from ASFA, the Financial Advice Association of Australia, the Law Council of Australia and the Financial Services Council indicated to the committee there is a significant discrepancy between what the government says the intent of this clause is, and what industry say its impacts will be,” the joint letter said.
“In the words of the FAAA, this clause ‘threatens the financial wellbeing of Australians’ and ‘add[s] nothing but confusion, uncertainty and cost.’ In the words of the Financial Services Council, this clause fails ‘to achieve the common policy objective of more affordable and accessible advice’ and will ‘put an unacceptable legal burden on trustees’ and ‘an unacceptable regulatory cost on advice businesses.’
“The Coalition therefore recommends that the government remove section 99FA in division 1 of Schedule 1 from the bill. We will support the bill should this change be made and work with the government to facilitate its speedy passage through the Senate and the House.”
ifa understands that the Coalition wants to see s99FA re-consulted on by the Treasury ahead of the government’s legislation implementing the second tranche of Quality of Advice Review recommendations.
In the Coalition senators’ dissenting report, they affirmed this view.
“By removing Section 99FA in Division 1 of Schedule 1 from the bill, speedy passage of the rest of the bill through the Senate and the House can be facilitated,” it said.
The dissenting view added the recommendation: “That Part 1 Schedule 1 of the bill be removed and the provisions re-consulted on by the Treasury in anticipation of Tranche 2 of the government’s legislation implementing the Quality of Advice review recommendations.”
There is a petition being circulated to move against this nonsense – https://www.change.org/p/protect-access-to-professional-financial-advice-for-all-australians. The only thing politicians understand is votes so would do so.
I remember well the enthusiasm in this forum for Mr Jones before the election. Behold the fruits of your gullibility. I knew my business would not survive another Labor gov and sold before they ruined the capital value of with pernicious legislation as this.
is Mr Jones the human version of the term ‘thoughts and prayers’ says words but when it comes to delivering, again just thoughts and prayers.
Absolutely disgusting.
Jones out, Labor out.
This report is an outrageous example of far-left factional partisanship, viewing superannuation funds as somehow belonging to the state and deeming it reasonable to put prohibitive roadblocks between members and their money “for the greater good” and to “keep all members safe.” It’s a blatant move to control access to personal funds under the guise of protection.
How can the Law Council tell Jess Walsh to her face that explanatory memorandums (EMs) don’t mean a thing, while she concludes that they do? Have these people no shame? It is clearly the view of this government, its non-profit supporters, and its ideological operatives within ASIC and the SMC that there needs to be a distance between members and “their” money.
This reminds me of The Chordettes’ song “Mr. Sandman” from 1958. Stephen Jones isn’t the non-profit sector’s Bagman; he’s their Sandman, lulling us into a false sense of security while he pours sand into the whole system.
The Senate committee’s report affirms the government’s position on section 99FA despite clear and compelling evidence from industry experts that it threatens the financial wellbeing of Australians. This clause adds confusion, uncertainty, and unnecessary costs. It fails to achieve the QAR objectives of more affordable and accessible advice, placing an unacceptable legal burden on trustees and increasing regulatory costs for advice businesses.
The only sensible course of action is to remove section 99FA from the bill entirely. This government needs to stop ignoring the real-world impacts of their ideologically driven decisions and listen to the professionals who are directly affected and their clients.
Did we really expect any alternate outcome, that could ease and minimise the burdensome cost of advice?
Oh look………pigs just flew by my window !!!
Regulatory Capture Corruption at its worst. ALP, Jones, ASIC, Treasury etc ALL on the take from Industry Super.
What a joke
So much for being a profession…. I wonder if dentists need to prove their work for the release of super from their clients portfolios.
Well, getting a straight answer from this government is like pulling teeth…
What?