Senate committee delays DBFO bill report

The Senate economics legislation committee has requested more time to finalise its report into the first Delivering Better Financial Outcomes (DBFO) bill, aiming for a new deadline of Friday, 21 June.

“On 27 March 2024, the Senate referred the provisions of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 to the Senate economics legislation committee for inquiry and report by 20 June 2024,” chair senator Jess Walsh said in a document tabled by the committee.

“The committee is conducting its inquiry and requests an extension of time to report until 21 June 2024 to allow it to consider the evidence received and to conclude its deliberations.”

The delay in reporting has come as a surprise, with many expecting the Senate committee to quickly affirm the government’s position on the bill, including the controversial changes to section 99FA of the SIS Act, which imply that trustees may be required to rigorously review each statement of advice (SOA) before allowing for the payment of advice fees.

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 rigorous reviews are not required, the profession and legal experts argue that changes to the EM are not adequate and that the legislation itself needs to be amended.

Despite their strong opposition to the section both in the media and before a Senate economics committee last week, Anderson believes the report being handed down today will reveal that the majority government view is that the bill is “fine as it is”.

“Ultimately, it will be debated in the Senate,” Anderson said on Thursday, adding that he expects the opposition to push for change.

He reminded that the Parliament is due for a break in two weeks, and while he expects the bill to get its time in the spotlight before that takes place, he did say “we might need to wait to August”.

Also on Thursday, shadow treasurer Angus Taylor and shadow minister for financial services 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.”