Labor slams ‘piecemeal’ FOFA report

Late last night the Senate Economics Legislation Committee tabled its report on the Bill amending FOFA, which went back for consultation after Senator Mathias Cormann paused the process following the standing down of former assistant treasurer Arthur Sinodinos.

While the committee majority recommended passage of the Bill, along with some minor clarifications, Labor and Greens senators issued strongly-worded dissenting reports, slamming the decision.

“Labor members of the committee note the majority report's recommendations 1 and 2 are little more than a piecemeal attempt to fix structural legislative gaps and failures using the explanatory memorandum,” said the dissenting report penned by Senators Mark Bishop and Louise Pratt.

“Labor members of the committee believe that the Bill in its current form is beyond repair and should be opposed. Furthermore, the government should abandon any attempts to rush in, again, a new set of regulations that in effect gut the FOFA reforms ahead of introducing new legislative charges.”

In addition, the ALP senators called for the reintroduction of measures to “restrict the use of the terms ‘financial planner’ and ‘financial adviser’” as well as calling on the government to change the term ‘general advice’ to ‘general information’.

Meanwhile, Greens Senator Peter Whish-Wilson also recommended the Bill not be passed, as well as coming to the defence of the industry super fund sector.

“It was disappointing that during the conduct of the hearing the government's line of questioning particularly targeted the conduct of Industry Super Funds, something that was outside the inquiry’s scope,” Senator Whish-Wilson wrote.

He also took aim at the “larger financial institutions” operating in the financial advice space, claiming the Greens are on the side of small business advisers.

“The Greens spoke to a number of smaller financial planners prior to the inquiry and acknowledge that feedback on the suite of amendments was mixed,” he said.

“We acknowledge concerns by some smaller financial planners around 'potential' uncertainty from the "catch all provision" and higher compliance costs from various other FOFA reforms (such as opt-in clauses) but we feel that these need to be carefully weighted against expected benefits to both consumers of financial services and the financial services industry.”