‘Fantastic, clear as mud’: Treasury cagey on DBFO timeline

During a Senate estimates hearing on Wednesday, Liberal senator Andrew Bragg pushed Treasury for a timeline on when the government would release the next stage of Delivering Better Financial Outcomes (DBFO) legislation.

Continuing the opposition’s method of keeping a running tally of how long it has been since Michelle Levy delivered the Quality of Advice Review final report to the government, Bragg said: “I think it's now 700 days since the review was given to the government. When will the second tranche be seen?”

Responding to the question, Andre Moore, assistant secretary of the advice and investment branch, stated that Treasury is in the “legislation development phase right now”.

“The Assistant Treasurer indicated that he wanted to progress the bill in this term of Parliament. We're continuing to work to those time frames,” Moore said.

He added that the next stage of the process is for an exposure draft legislation and that Treasury is “working on developing that legislation”, however the timing for release of the draft “ultimately will be a decision of the government and the minister.

“I don't have a time frame for that at the moment,” Moore said, adding that they “don't have a complete draft”.

Given the proximity of the upcoming federal election, Bragg said the exposure draft would “have to happen pretty soon, wouldn't it, If you're going to meet [the deadline of] this Parliament”.

Moore responded: “It would have to happen in the coming, you know, period.”

“Fantastic, clear as mud,” Bragg retorted.

Following Liberal MP Bert van Manen introducing a financial advice private member’s bill on Monday, a spokesperson for Financial Services Minister Stephen Jones told ifa the next package of reforms is on the way but also declined to provide a timeline.

“The government is drafting the next tranche of reforms for introduction which will cut red tape on financial advisers, including by streamlining statements of advice, removing the safe harbour steps and modernising the best interests duty,” the spokesperson said.

“The government’s reforms are a package which will reform the financial advice framework as a whole. It will provide certainty to stakeholders and better affordability for consumers without compromising quality.”

This is largely in line with the minister’s statements last week at the AFR Super and Wealth Summit, signalling that it would be introduced before the country heads to the polls.

“We have delivered the first tranche of reforms, and the next tranche of reforms is being drafted and prepared for introduction,” he said at the time.

“In this tranche of reforms, we will modernise the best interests duty and remove the safe harbour steps. We will reform statements of advice so that they are actually usable by the consumer who paid for it to make informed decisions.

“And we will create a new class of adviser who will be able to provide simple and safe advice. Advice will be safe – so that we protect Australians from bad advice. Advice will be helpful – so that it is useful and fit for purpose. And advice will be quality – so that it delivers the best outcomes for Australians.”

According to Phil Anderson, general manager of policy, advocacy and standards at the Financial Advice Association Australia (FAAA), the minister’s statements suggest that it could be “closer than we had anticipated”.

“We’ve obviously been desperately waiting for this for a long time. I think the statement of last week and his earlier commitment on the day that DBFO tranche one was passed was that we would see draft legislation by the end of this year,” Anderson told ifa.

“I think you would normally expect that that won’t be any later than, say, the end of the first week of December. So, we’re now into the last few weeks of when it might be likely to come out.”

Non-disclosure agreements

Senator Bragg also took aim at Treasury’s use of non-disclosure agreements during its consultation process on DBFO, questioning Moore on how many have been used and who the department is “consulting with in secret”.

“We've consulted confidentially with the full spectrum of stakeholders that are heavily engaged in the development of this legislation,” the assistant secretary said.

However he took on notice questions around how many were signed, how many super funds were consulted, and whether Cbus specifically was involved in the process, saying he “can’t recall”.

“All right, so the position of the department is that you're trying to work the minister's commitment of doing it in this Parliament?” Bragg added.

“Yes. So, as with all legislation, we work to the government's priorities,” Moore responded.

“And you've got non-disclosure agreements, and you've got a bill coming soon, we hope,” Bragg finished.