‘Deeply unserious answers’: Lib senators criticise speed of financial services reforms

Liberal senator Andrew Bragg has labelled the government’s defence of its efforts to draft, much less pass, financial services legislation as “deeply unserious answers to what is a very serious question”.

Drawing the ire of Bragg at the Senate estimates hearing on Wednesday afternoon was the lack of progress on getting cryptocurrency regulations in front of Parliament, with the senator again questioning Treasury officials if the problem lay in Financial Services Minister Stephen Jones’ office.

“I reckon about two or three estimates hearings ago, when I was asking [Treasury] about the government’s plan to regulate crypto, I think I said at the time that I had no confidence that the government would ever deliver a bill on crypto. This is despite the Treasurer promising to do so after the FTX collapse. Now we’re at the back end of this Parliament about to have an election. That was a good prediction,” Bragg said.

He added: “My question is, what’s happened here? The Treasurer of the country has promised that the Labor Party would regulate crypto to protect consumers and investor confidence, and in three years, nothing’s happened.

“I just want to know what went wrong; did it get lost in Jonesie’s office? Did the dog eat the bill? What happened?”

James Kelly, first assistant secretary digital, competition and payments division at Treasury, responded that the answer is much the same as the last time Bragg inquired.

“We’re progressing the drafting of an exposure draft of the bill to give effect to the government’s pledged reforms,” Kelly said.

On learning that the draft bill was still not completed, Senator Bragg questioned why it has taken three years to draft a cryptocurrency bill.

“It’s taken three years to go from various consultation processes and then kind of working up the instructions for OPC [the Office of Parliamentary Counsel] and then beginning to engage with OPC,” Kelly said.

“Now, there are other priorities for government that affected how early we’ve got to the OPC drafter, but we’re working on it now.”

While Bragg argued this was a sign the legislation had “clearly been deprioritised”, Finance Minister Katy Gallagher said it was indicative of a “very busy legislative agenda area in that portfolio”.

“It’s a huge amount of [legislation] that comes through the Senate in this portfolio, and there’s been a lot of consultation done on crypto, including with the industry, and taking all of the feedback that’s necessary,” Gallagher said.

The minister also pushed back on the notion that the bill would not be passed during this term of Parliament, despite no draft bill being completed and an election fast approaching, noting that the Senate can “deal with things pretty quickly”.

Senator Bragg replied: “I mean, all I’d say is, these are deeply unserious answers to what is a very serious question that a lot of Australians would be expecting you to be able to keep your word that you said you would protect consumers but also incentivise investment in Australia through digital assets.

“We’re now at the end of this term. I’m sure the minister is sincere in maintaining the government’s commitment, but we all know that there’s no way that a bill will pass in this term.”

Bragg has previously questioned whether Minister Jones’ office is the source of the slow progress on financial services reforms, saying in a November estimates hearing that “a lot of projects seem to go there to sort of die or not be progressed”.

According to Bragg, the delays extend beyond financial advice and a range of measures feels a “long way away”.

“Is the constraint here the assistant treasurer’s office?” he asked.

Gallagher interjected to disagree with Bragg’s assessment.

“No. I know you’d like to besmirch him every chance you can. He has a very large workload and a very high legislative agenda, probably, I would think next to perhaps the [attorney-general], the biggest legislative agenda,” Gallagher said.

“And there’s constraints, for example, in drafting, resources and other things. And this tends to be … in my experience, these bills are often contested and complex.”

However, Bragg added that he “read in the paper” that the “only way stakeholders can get meetings with him is by going to a Labor Party fundraiser”.

“So, he seems to be a bit of a problem.”

Ban on adverse genetic testing in life insurance

Senator Bragg was not alone in his criticisms of the government’s progression of legislation, with fellow Liberal senator Wendy Askew questioning why the ban on genetic discrimination in life insurance, which has bipartisan support, has also not had a draft bill released.

“The government announced in September 2024 that it would introduce the total legislative ban on the use of genetic test results in life insurance underwriting in this parliamentary term,” Askew said.

However, earlier this month, the government launched a technical consultation on the legislative design and technical details of the ban, including the definition of a genetic test, enforcement of the ban and implementation.

“Just wanting to understand what the reason is that there’s been a failure to actually deliver the legislation as committed to by the government,” Askew added.

Rob Preston, assistant secretary insurance task force branch, said the difference between the consultation process that Treasury is undertaking now compared with the previous process is that “we’re looking now at the practicality around how we how we go through and enact that ban”.

“That’s looking at issues around, the medical accuracy, operational issues around how to ensure can be implemented effectively by the insurance industry, clarity, particularly for consumers, medical practitioners, the genomic industry, who have to engage with the bill, and then also a number of legislative design issues,” Preston said.

“So, that gets to how we how we think about how the tests can be volunteered, the definition of genetic test, how we grapple with existing contracts and so on.”

With the government to enter caretaker mode upon an election being called, Askew asked Preston whether development could continue on the legislation, given it has received bipartisan support.

“There’s no reason why we cannot continue to progress it. We will review the feedback that we get and continue to work towards developing exposure draft legislation,” Preston said; however, he noted there is no “normal time frame” when it comes to exposure draft legislation.

Earlier this month, shadow financial services minister Luke Howarth said the failure to get the ban over the line is an “egregious example” of the government’s inability to progress financial services reform.

“Under the status quo, people who could benefit from genetic testing are discouraged because of the risk of insurance discrimination. There is broad agreement and support for this ban on life insurers using genetic testing to refuse cover,” Howarth said at the time.

“This is an egregious example of the Albanese government’s focus on announcements and grandstanding, rather than the follow-through. It has become clear this is not a priority for the Albanese government, with legislation nowhere to be seen on the eve of an election.”