DBFO bill passes Parliament

The first Delivering Better Financial Outcomes (DBFO) bill passed the House of Representatives on Thursday afternoon just hours after the Senate greenlit the bill following last-minute amendments moved by the Financial Services Minister Stephen Jones.

The bill's return to the lower house was due to amendments to Section 99FA to clarify that superannuation trustees are able to take a risk-based sampling approach when approving the payment of advice fees from member funds.

This return to the House of Representatives was just a formality. As such, the bill has now officially passed Parliament and is headed for royal assent.

Shadow financial services minister Luke Howarth and shadow treasurer Angus Taylor issued a joint statement on Thursday, calling the government's amendments an "embarrassing attempt to cover up its botched legislative rollout".

"It took Labor a staggering 16 months to begin responding to the review, and we still don’t have a timeline for a full legislative response," Howarth and Taylor said.

"While today’s amendments attempt to address these concerns, it’s too little, too late.

"Stephen Jones’ incompetence has been exposed once again."

On Thursday morning, Minister Stephen Jones moved parliamentary amendments to omit language in paragraph 99FA(1)(a) which would require that the financial product advice in respect of which costs are charged is wholly or partly about the member’s interest in the fund; and repeal paragraph 99FA(1)(b), which would require that the amount charged does not exceed the cost of providing financial product advice about the member’s interest in the fund.

Speaking in the Senate ahead of the vote, Labor senator Jess Walsh said the reforms would allow more Australians to access financial advice and “make it more affordable”.

“It’s as simple as that, and this is critical reform. As more and more Australians approach retirement, our government is committed to making it easier for Australians to receive the financial advice that they want,” Walsh said.

She added that there is “wide support from across the sector for these reforms” and that the bill will provide the certainty that both the advice and super sectors need.

“We know that it’s important for Australians to have access to financial advice, particularly as they approach retirement,” Walsh said.

“They are well supported, they cut red tape, they deliver better financial outcomes, and it is a good thing that, through a process of consultation with industry and with stakeholders, we have a bill before the Parliament supported by the opposition.”

Also speaking in the Senate on Thursday, Liberal senator Andrew Bragg gave credit to the government for “agreeing to amend the legislation in the way that we had suggested they do”.

“But I put it on record that this is a very small reform in the financial advice space that the government inherited a very good review by Michelle Levy, which pointed out that financial advice is now almost unaffordable in Australia if you are an average worker,” Bragg said.

The senator added that he welcomed the government’s flexibility and Minister Jones’ “capitulation” in making the amendments.

“We’re very pleased that the sector can benefit from having clearly drafted legislation which is going to allow people to get advice from their super fund,” Bragg said.

“But we want to see the government move on the rest of the levy review. We want to see the government deliver the rest of those reforms.”

Greens senator Sarah Hanson-Young was less pleased with the amendments being rushed in on the morning that the bill was to be voted on.

“I just want to make it clear that in relation to the government’s newly rushed and circulated amendments for financial advice to be paid out of client superannuation balances, we haven’t had time to consider these amendments, and they’ve been rushed in this morning. There’s been a deal done over here with the Dutton Coalition. I mean, it’s all being done under the cover of chaos.”

Hanson-Young added that the Greens senators would vote against the amendments.

“Won’t matter in this place, because you’ve done a deal with the Dutton Coalition to undermine super and to undermine regular people and their retirement savings,” she said.