17 February 2014

The facts on the Coalition Government’s Future of Financial Advice (FOFA) amendments

The Assistant Treasurer, Senator the Hon Arthur Sinodinos AO, today set the facts straight about the Government's FOFA reform package.

As foreshadowed publicly in 2013, the Government will make regulations to give effect to its FOFA amendments, to the extent legally possible, to provide certainty to industry prior to the legislation being passed by the Parliament.

It has always been the case that the regulations will be backed by legislation. This legislation will be introduced into Parliament in the coming weeks.

In relation to the legal advice obtained by Industry Super Australia, all Commonwealth legislation can be legally challenged and that is ultimately a matter for the courts.

The Government does not intend to speculate on hypothetical court challenges to the regulations.

"I encourage all stakeholders to provide input to the consultation process as submissions close this week," said Senator Sinodinos.

The reforms to reduce red tape and cut compliance costs for business and the consumer are a Coalition election commitment and were well signalled before the Federal election.

"Recent media coverage has also focused on the case of Storm Financial, but let's be clear, no amount of regulation can prevent another financial collapse as you can never regulate away all risk," said Senator Sinodinos.

"Neither our reforms nor the existing FOFA laws can prevent a possible future financial collapse."

"I have made it clear that we will implement our election commitment to achieve our policy intent."

"The Abbott Government will continue to listen carefully to all views put forward and will consider the drafting of regulations and legislation if it does not reflect our policy intent."

The Federal Opposition could remove any uncertainty by supporting the passage of the FOFA amendments consistent with the Coalition's election commitments.