The Office of Best Practice Regulation (OBPR) did not have sufficient time to review the regulatory impact statements of the federal government’s advice reforms before they reached draft legislation stage, a Treasury representative has claimed.
Treasury market group executive director Jim Murphy made the claim at yesterday’s Parliamentary Joint Committee (PJC) inquiry into the Future of Financial Advice (FOFA) reforms after PJC member Mathias Cormann called on him to comment on the adequacy levels of the statements released alongside the FOFA bills in August last year.
“The fact of the matter is OBPR ran out of time,” Murphy said.
“This [the assessment of the FOFA bills] occurred during the Easter break, the regulatory impact statements were prepared, the government wished to introduce legislation, [so] there was insufficient time for assessment.
“It may have been that we [Treasury] weren’t quick enough to get them [the statements] to them or it was too complex. So now there is a review that is looking at the issues.”
In response to Murphy’s claim, Cormann, also the federal opposition assistant treasury spokesman, was quick to ask for further details.
“What I’m saying is that for whatever reason there was insufficient time for these [regulatory statements] to be assessed,” Murphy said.
“By whom?” Cormann interjected.
“By OBPR,” Murphy replied.
To which Cormann asked: “So the reason they are saying they [the statements] are inadequate is because they didn’t have enough time to assess them?”
Murphy continued: “This is just the facts. There were six separate regulatory impact statements on particular issues. There was some toing-and-froing between ourselves and them over a few days. It ran into Easter.
“The government had made it very clear it wanted to introduce these bills and OBPR took the position that they couldn’t approve them in the time. And so that’s how we end up with this result.”
Murphy said as a result of the outcome of the OBPR’s assessment of FOFA, two plans of action had been taken by Treasury.
“One is there is a review of the way these processes operate,” he said.
“Two … and I can’t speak for the Minister [for Financial Services and Superannuation Bill Shorten], but it would clarify these matters if these regulatory impact statements could be released in some way.”
After considering Murphy’s comments, Cormann questioned him on whether he believed a “proper regulatory assessment was warranted, particularly in light of claims of significant cost impacts to both industry and end clients”.
“All I can say is, you’re quoting certain figures, Senator, which I haven’t had the opportunity to look at or to examine as to how those figures were come by, so I really can’t comment on that,” Murphy said.
In October last year, the government admitted to breaching the OBPR requirements in changes to its FOFA reforms after questions from Cormann before the Senate Estimates.
