Financial advisers looking for answers to questions surrounding the construction of the Compensation Scheme of Last Resort (CSLR) and what was known about the Dixon advisory collapse are no closer to getting them despite Treasury being probed at Senate estimates late last year.
Senator Andrew Bragg put a number of questions related to the CSLR to Treasury officials on 15 November 2024. Treasury took the questions on notice and should have provided a response in January; however, it failed to meet that deadline.
Taking to LinkedIn more than a month ago, Financial Advice Association Australia (FAAA) general manager of policy advocacy and standards Phil Anderson asked why there had been such a delay.
“They are really good questions and we are really keen to get answers to these questions. This is particularly important in the context of the announcement today on the huge CSLR Levy for 2025–26,” Anderson said.
“Unfortunately, these questions are marked as unanswered and overdue. Clearly well overdue.”
He added: “Come on Treasury! Two and a half months is heaps of time to answer these important questions.”
Well, Treasury has finally “answered” the questions; however, they provide little substance and continue a pattern of perfunctory responses on the topic of the CSLR.
“When the government tabled the Compensation Scheme of Last Resort legislation in March 2023, had Treasury done a projection or estimate of what this would cost the 10 largest financial institutions, the government and the financial advice profession?” Bragg asked in November.
“What did that estimate suggest the cost would be?
“Given that the Dixon Advisory collapse was well known at that time, and the administrator had issued a creditors report in November 2022, stating that 4,606 clients had lost $368 million, why didn’t Treasury make this information available to the Parliament?
“Did Treasury recommend any changes to the scheme’s design at the time or warn the government about the risks of the levy blowing out for years to come?”
Rather than deliver straightforward, clear answers to the inquiries, Treasury opted instead to explain the total cap on the CSLR of $250 million and the subsector caps of $20 million, before adding that “uncertainty” hampered efforts to estimate costs.
“Whilst the government has periodically sought to estimate the impact of the scheme, there have been a significant number of unknowns and uncertainties in relation to these estimates,” Treasury said.
“For example, claims in relation to Dixon Advisory & Superannuation Services Pty Ltd were still in the process of being lodged with the Australian Financial Complaints Authority (AFCA), and there was significant uncertainty as to the outcome of these claims at AFCA and the Compensation Scheme of Last Resort (CSLR).”
Bragg also asked why Treasury recommended increasing the subsector caps from $10 million to $20 million, and whether Treasury anticipated “that the Dixon collapse would result in the cap being exceeded”.
“The intent of the CSLR, consistent with the Ramsay review, is that the subsector that causes the need for compensation should bear the cost in the first instance, which is reflected by the subsector cap,” Treasury responded.
The second part of the question was ignored entirely.
The only question Treasury directly answered is one that has been well explored since Bragg raised it: what options the minister has to deal with levies that exceed the sector cap.
History of skating around questions
In written questions on notice as part of the Senate estimates process in June last year, Bragg directed a series of thorny questions to Treasury regarding the impact of the Dixon on the construction of the CSLR.
Bragg had asked whether the CSLR bill’s explanatory memorandum made any reference to Dixon Advisory, given more than 1,600 complaints had been made ahead of its drafting, and “If not, then why not?”
“The explanatory memorandum for the CSLR package of bills that were introduced on 8 March 2023 did not include any references to Dixon Advisory or to any of the other insolvent entities,” Treasury said, not providing a response to the senator’s secondary question, similar to the lack of response in the latest set of questions.
In a second LinkedIn post before Treasury had responded to Bragg’s questions, Anderson argued it “should not take three months to provide these answers”, also raising concerns on what this means for the Treasury review of the CSLR.
“The minister has asked Treasury to do a comprehensive review of the CSLR, however their failure to answer these questions makes me a little apprehensive about whether they are the appropriate party to do this,” he added.
Speaking with ifa in February, Anderson argued that a lot of the problems with the scheme’s operation are already “well known”, with a range of stakeholders detailing the issues in their submissions to the Senate inquiry into the Dixon Advisory collapse.
“We want action,” he told ifa.
“We don’t want sitting around for months waiting for action to be taken when there is no certainty of when that will occur.
“The problems are already known, the need for the government to take action has been fundamentally clear for a very long time.”
Maybe Nerida Cole from Treasury might like to put her head above the parapet wall and explain a few things instead of hiding away behind the protective barrier created by someone inside who knew what was going to develop with the disgusting and unforgivable Dixon’s outcome??
C’mon Nerida, we are all waiting for you to make an appearance.
Yes as a former Dixon client I remember well Nerida Cole and other Dixon management representatives at the yearly Investment Conference, after Alan Dixon had flown the coupe, dodging questions being raised about the activities of related Dixon Investment Products particularly URF. They should all hang their heads in shame. Unfortunately we as clients were too passive in not adequately forcing those responsible to come clean with information that was being withheld. The law is obviously in their favour if they cannot be pursued for their personal wealth.
If I’m paying the CSLR, can I send an email to Treasury asking…
“What did you achieve last week?”
Treasury achieved avoiding answering important questions re Dodgy Dixon’s and CSLR.
Corrupt and Untouchable.
Where is the Anti Corruption Commission on the AIOFP complaint for last 8 mths ?
I’d love to work in Canberra.
In my opinion –
– You can be really bad at your job, seemingly be unaccountable, paid well and difficult to remove.
– You have the ability to stall and operate at ‘warp speed – for slugs’
– The public will look to your title and think, wow, they must be really good and important.
– Yet here I sit, day after day, month after month of watching Canberra make an absolute mess out of everything it touches with regard to financial advice.
I thought that Canberra was a place that aspired to have the best people doing great things for Australia.
Yeah nah…
The same w@nks who came up with qualified adviser too lazy and stupid to do simple forecasts. Disgusting bias thieving losers
Once upon a time Treasury was the training ground for Australia’s best and brightest. Many of our current economic and industry leaders spent their formative years at Treasury.
But since the advent of woke activism, Treasury has become the home of incompetent morons, and dodgy scoundrels manipulating a broken system for their own benefit. Treasury needs a massive cleanout.
Frank and fearless advice from Treasury?
if we in Australia had a DOGE – Treasury would be a great place to start?
Give Treasury staff the door – and the reason for sacking them – give them the same respect back with a short answer – months late?
How many staff at Treasury and what is the average income?
If you’re telling the truth, normally, you will explain things with conviction and not skirt around it.
This is what this financial planner did when this financial planner was permanently banned due to alleged insurance churning based on manipulated & incomplete evidence.
This financial planner represented himself for 2 days providing factual information and the truth.
DOGE, where are you?
Mandatory caning for all those who avoid questions. Starting with their respective leaders.
Then, let’s see who will continue to “take on notice”
Time for a royal commission into Treasury, ASIC and APRA. They all have multiple failings and are avoiding any responsibility or accountability. How are they allowed to continually avoid answering very important questions from Senate sub committees? It seems they answer to no one, and no one seems concerned.
Treasury, ASIC and APRA have proven far too many times they are Corrupt, Conflicted and totally useless.
With the latest large scale ASIC banning likely to result in CSLR fees in excess of 40k per adviser. You can see the perverse incentive at play.
As an adviser we want the rogues eliminated from the profession, but we identify them. ASIC take years to take action and good advisers end up footing the bill for both ASIC and the compensation.
Leaving the industry incentivised to ignore dodgy behaviour.
The dodgy parts of the industry are incentivised to rip off clients as much as possible with dodgy product – knowing they can shift the funds and ASIC wont chase them because it’s just easier on government to charge every other planner.
How would senators feel if they were made to pay for the corruption of other senators and personally fund the police who look for that corruption?
Nobody should be surprised by the non answers from these treasury muppets!
And this is the same bunch of clowns being asked to provide financial advisers with access to the ATO portal…
In case you needed another example that time is up and no more words are needed only actions then this is it! Take matters into your own hands starting with major associations FAAA and/or AIOFP endorsing that AFSL’s do not pay the ridiculous CSLR levy. Then sit back and watch how the cardigan wearers deal with that because they won’t shut you down there is already a lack of advisers for the growing demands of the public.
At last someone who makes sense.
Better to die on your feet than to live on your knees!
That’s because they stuffed up, screwed the industry and are now trying to duck for cover.
How the hell these muppets still have a job is beyond the pale!