With the Labor government’s flagship financial services reforms due to take effect on Monday, the federal Coalition has thrown its support behind industry calls to have both FOFA and Stronger Super postponed for twelve months.
After months of criticising the government’s financial services reform package but not committing to any concrete course of action, yesterday Shadow minister for financial services and superannuation Mathias Cormann told InvestorDaily he supports a reprieve for the industry, calling on the government to announce an amendment to postpone the reforms before the parliament rises today.
“The implementation of FOFA and Stronger Super clearly should be extended by 12 months,” he said.
“The government’s disjointed and chaotic handling of complex FOFA and Stronger Super legislation means that financial services businesses across Australia will not be in a position to comply from next Monday.
“It is highly undesirable to have large numbers of financial services providers forced into a situation where they have no chance but to be non-compliant.”
The comments from Senator Cormann follow calls from financial services industry associations yesterday to push back the reforms, despite indications recently that the new regime is now a reality.
Association of Financial Advisers chief executive Brad Fox told InvestorDaily an extension was now necessary and that previous assessments of the industry being able to comply were misguided.
“We think some form of extension is necessary and the reason is that there are so many things still unknown,” he said.
“The context is that government, ASIC (the Australian Securities and Investments Commission), Treasury and the industry have all underestimated the challenge to be ready by Monday.
“It’s not through lack of resources at industry level – we still don’t have grandfathering regulations or corporate super guidance.”
Mr Fox called on the minister for financial services Bill Shorten to offer instruction to ASIC to delay the “policing” of the reform package.
FSC chief executive John Brogden said his organisation has written to new prime minister Kevin Rudd to request a 12 month extension to the implementation of FOFA and Stronger Super changes.
The FSC said part of the reason it had requested an extension was the late introduction of key parts of the MySuper regime on 24 June, and the fact the industry was faced with implementing the wide ranging reforms without a transition period.
