Another QAR drafting issue revealed – could it delay bill further?

In a statement slamming the government’s progress on the Quality of Advice Review (QAR), shadow treasurer Angus Taylor and shadow financial services minister Luke Howarth drew attention to a drafting mistake in the Treasury Laws Amendment (Delivery Better Financial Outcomes and Other Measures) Bill 2024.

In what the shadow ministers refer to as an “embarrassing blunder”, the bill includes language that would effectively stop general advice providers from utilising the exemption on conflicted remuneration in section 963B of the Corporations Act.

The bill proposes to amend multiple paragraphs within this section to make them “subject to section 963BB”, a new subsection that adds additional conditions to the exemption.

Specifically, the new section stops the exemption from applying unless the “licensee or the representative provides, or is likely to provide, personal advice to the client in relation to the relevant product”.

Speaking with ifa, Financial Advice Association Australia’s (FAAA) general manager of policy advocacy and standards, Phil Anderson, said the exemption would now “seemingly only apply in the case of personal advice”.

“That wasn't in there in the version that was issued for consultation in November of last year,” Anderson said.

According to the opposition’s statement, the government is “scrambling to redraft [the legislation]” because, in its current form, it would force insurance brokers to “overhaul their entire business model”.

“Unsurprisingly, the first tranche of the legislation is riddled with errors that put other vital measures in the bill at risk,” Taylor said.

“Labor just can't help itself. Stephen Jones is making access to advice harder, at a time Australians are crying out for affordable financial advice.”

According to Howarth, the QAR legislation has proven that Financial Services Minister Stephen Jones is “out of touch and out of depth”.

“The only thing the Assistant Treasurer has successfully delivered in his scrambled legislation is confusion and chaos,” Howarth said.

The question, however, is whether this is merely political point scoring or if there really is a mad dash behind the scenes to fix the offending amendment.

While Treasury resources may now be diverted to drafting a fix for the error, as ifa previously covered, Parliament is now on hiatus until the federal budget, with both houses scheduled to convene on 14 May.

According to Anderson, the delays that have already been built into the timeline for the bill are unlikely to be extended and the government has options available to correct the mistake.

“They can introduce an amendment at any stage and it's not that unusual that you would get amendments moved by the government to their own legislation,” he said.

“So, it can go in then and it can be debated as part of the process before they look to formally pass it in the House of Representatives.”

He added that this redrafting process also offers Jones an opportunity to “put some changes in” before the bill is debated in the House, including the issue of super fund trustees needing to review every advice document before they approve fee arrangements.