19 November 2014

Senate vote on FOFA

The Senate's vote to disallow the Government's improvements to our financial advice laws, after supporting them twice over the past four months, is bad news for consumers and for small business financial advisers.

Sadly, good public policy reform which the Government took to the last election has now been caught up in internal minor party disputes.

By disallowing our FOFA improvements the Senate tonight voted to increase the cost of financial advice and to lessen competition across the financial advice industry without improving consumer protections for Australians saving for their retirement.

This is not in the public interest.

The Government will continue to progress its substantive FOFA legislation giving effect to our improvements through the Senate.

In the meantime, given the Government’s FOFA improvements had force of law over nearly 5 months, I have asked ASIC to facilitate an appropriate transition to 1 July 2015.

I note that Labor in the Senate agreed to that approach on the public record.

While tonight's vote is disappointing, the Government remains committed to these reforms.

We will continue to work to ensure we have a robust but also an efficient financial services regulatory system, which is competitively neutral so that people saving for their retirement or managing financial risks through life can access high quality advice they can trust and which is also affordable.