The Minister for Superannuation has hit back at accusations his government did not follow correct protocol while conducting work on its industry reforms.
In response to a determination by the Office of Best Practice Regulation (OBPR) raised by the opposition assistant treasury spokesman, Mathias Cormann, earlier this week, that the government breached its own best practice regulation requirements in changes to its Future of Financial Advice (FOFA) reforms, Bill Shorten said such suggestions were inaccurate.
“Setting aside all of Senator Cormann’s errors, inaccuracies and exaggerations, the fact of the matter is the government consulted extensively on the FOFA reforms for two years,” a spokesman for Shorten said.
To illustrate the point further, he said there have been nine Peak Consultation Group meetings, including meetings during each of the consultation periods for the exposure drafts of tranches one and two.
“There have been public information sessions held across Australia and a very large number of targeted consultations with a wide range of industry and consumer stakeholders, a process which continues today,” he said.
“The government remains on track with progressing these very important reforms, having released draft legislation for public consultation and introduced the first tranche of legislation into parliament.”
Yesterday, Cormann highlighted an admission made by Treasury in evidence before the Senate Estimates as proof of a breach.
When questioning a Treasury representative on the feedback from the Office of Best Practice Regulation (OBPR) during Senate Estimates, the representative replied that Treasury would not undertake analysis on the regulatory impact statements in relation to FOFA.
“So you haven’t had any feedback from the [OBPR]?” Cormann said.
“Yeah, well, we, um, were found to be in breach of the requirements,” the representative added.
“So that was non-compliance with best practice regulation requirements?” Cormann said.
“Yes,” the representative replied.
It was also found that the FOFA proposal was “non-compliant with the Australian government’s best practice regulation requirements”.
“We want to see this flawed FOFA legislation scrutinised by a Parliamentary Committee. Bill Shorten really should pull the legislation and put it through a proper regulatory impact assessment as required by the government’s own guidelines,” Cormann said.
“Bill Shorten should explain why he failed to comply with the government’s own best practice regulation requirements.”
Also weighing into the debate is the FPA, which stated the Senate Estimates comments “vindicate its opposition” to the opt-in proposals.
“This frank admission by Treasury vindicates our recent criticism of the rushed alterations made to the final draft FOFA legislation. These were critical changes ushered into an important draft with no consultation and zero consideration for the harsh impacts on financial planners and their clients,” FPA chief executive Mark Rantall said.
“The FPA is committed to supporting sensible reforms which bolster the momentum we have created in enhancing consumer trust in advice and building a strong financial planning profession. But reform must improve – not hinder – sensible consumer-protection standards.
“The FPA calls on the government to scrap the controversial measures and focus on increasing consumer-protection measures such as the best interest test duty and the banning of commissions.”
