Criticism of the federal government’s Future of Financial Advice (FOFA) is part of the legislative process but if draft reforms are not passed, Australia’s financial services sector risks being left in limbo, the Federal Member for Oxley, Bernie Ripoll , has claimed.
“I think criticism of any legislative change or reform is a normal part of the process. Honestly, I think it’s quite healthy. Not everyone should agree,” Ripoll said.
“I think what we should all come to a conclusion on is though, it actually is a fair package. It’s workable, it’s affordable, it’s accessible and achieves all the government’s goals right from the start.”
He said the two tranches of FOFA provide for an open, fair and free market but also provide consumer protection.
“I think that as a package, I think it is a fair package and it ought to be passed by both houses,” he said.
When asked whether criticism of Minister for Financial Services Bill Shorten’s stance on the reforms was warranted, Ripoll dismissed the issue.
“Whether FOFA goes further than my report had originally determined is not really a matter,” he said.
He said while the Ripoll report formed the basis of FOFA today, FOFA was a lot larger than the reform.
“It also includes the Cooper inquiry and a range of other things that have been happening. So it’s not limited to, but certainly the core of, it,” he said.
“The greatest risk for the sector is that these two tranches and these bills don’t pass because then there will actually be a huge vacuum that will exist in the market and that is, what will people do?”
“Will they go back to pre-inquiry and pre-FOFA? Given that most of the sector has already moved on and already achieved most of the reforms before it’s legislated? Or do they just sit and wait now in limbo?
“There’s a whole range of uncertainty and I think it’s really bad for business. I really think there is enough good will out there for it to just move on and move forward with this and people can just move on with business with the certainty that the reforms provide.”
On Friday, the Senate called on the Parliamentary Joint Committee (PJC), of which Ripoll is chair, to review the FOFA drafts.
“My understanding is, and I don’t have the details in front of me, but the Senate has referred it back to the committee for review,” Ripoll said.
Ripoll was only able to speculate as to the exact reason why such a referral was made.
“I’m not sure why it has been referred to us but obviously I have my view as to why it has been referred to us. We’ll deal with it according to our charter as a committee,” he said.
While Ripoll was not willing to comment on whether rumblings within Coalition prompted the move by the Senate, it would appear to be the main reason.
Last Wednesday, the government admitted to breaching the Office of Best Practice Regulation in changes to its FOFA reforms after questions from the opposition assistant treasury spokesman Senator Mathias Cormann before the Senate Estimates Committee.
