The SPEAKER (Hon. Peter Slipper) took the chair at 09:00, made an acknowledgement of country and read prayers.
That the order of the day be referred to the Federation Chamber for debate.
That the following bills be referred to the Federation Chamber for further consideration:
Judges and Governors-General Legislation Amendment (Family Law) 2012;
Corporations Amendment (Future of Financial Advice) 2011; and
Corporations Amendment (Further Future of Financial Advice Measures) 2011.
That this bill be now read a second time.
That this bill be now read a second time.
That this bill be now read a second time.
That this bill be now read a second time.
That this bill be now read a second time.
That this bill be now read a second time.
That, in accordance with the provisions of the Public Works Committee Act 1969 , it is expedient to carry out the following proposed work which was referred to the Parliamentary Standing Committee on Public Works and on which the committee has duly reported to Parliament: Construction of projects two and three of the Christmas Island new housing program.
That the House take note of the report.
That the order of the day be referred to the Federation Chamber for debate.
When considering electoral reforms, our priority must be: enfranchisement, not disenfranchisement.
The Committee remains concerned about the long-term effects of the decline in enrolment participation rates, and notes that the decline has continued despite ongoing efforts on the part of the Australian Electoral Commission, the AEC, to arrest it using measures currently permitted under the Commonwealth Electoral Act.
If we have to spend $36 million every election year then that is a significant amount of money over successive elections. But, perhaps more importantly, it does not lead to a permanent or long-lasting improvement in the electoral roll. These gains are quickly dissipated months after the close of rolls as people start to move again and the same challenges
Our view is that we now need to go further with our recommendation, suggesting direct update of the electoral roll based on third party information
Generally, people are becoming less inclined to respond to written communications.
We wrote … telling them that they were on the roll and they had 14 days to let us know if we had got it wrong. We received no correspondence from anyone saying that we got it wrong, due to the safeguards that we had in the process.
… direct update of elector addresses using reliable third-party information is not only a next logical step in the evolution of electoral roll administrative practices but also consistent with growing expectations of many in the community for seamless use of data across government agencies.
The right to vote is one of the privileges of living in a democracy—you get a say in who runs your country.
One of the concerns about receiving data from trusted agencies for the purpose of automatic enrolment or automatic update of electors is that any address data sourced from these agencies was not gathered for the purpose of collecting electorate information.
It is all very well keeping kids at school past year 10, but they have got to be the right kids …
ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased.
… allow the Electoral Commissioner to directly update an elector's enrolled address following the receipt and analysis of reliable and current data sources from outside the Australian Electoral Commission that indicate an elector has moved residential address;
I believe part of the problem is that the presumption is that there is a desire to maximise the number of people on the rolls. I do not believe that is an appropriate objective. The notion of the vote is a right—it is an entitlement—and turning it into an obligation, which is what that entails, I just do not believe is appropriate in a democratic process. The intention should be to maximise people's opportunity to enrol and to vote, and this goes well beyond that.
If there are cases of potential electoral fraud, that is one less piece of evidence the commission will have in its armoury.
You currently have a form that you can compare signatures to if, for example, people are using declaration votes and have to sign the envelope. That will not be available under these provisions.
Coalition Members and Senators strongly disagree with the Labor and Green members of the Joint Standing Committee on Electoral Matters that the Electoral and Referendum Amendment (Protecting Elector Participation) Bill 2012 (i.e. automatic enrolment) be passed by the Parliament. The Coalition has long opposed moves by the Labor Party and the Greens to introduce automatic enrolment and notes that this Bill is being introduced solely to improve the electoral prospects of both Labor and the Greens. This follows similar moves by the former Labor Governments in NSW and Victoria prior to their last state elections.
This legislation will severely damage the integrity of the Electoral Roll by adding new electors who may not be entitled to vote without their knowledge and potentially without their consent, should the elector not receive the Australian Electoral Commission’s notice of enrolment.
It is imperative that the Roll which is used to elect our Parliamentarians is accurate and reliable, particularly in the wake of the 2010 Federal Election where no political party won a majority of seats in the House of Representatives and results in a number of individual electorates came down to only a few hundred votes.
Coalition Members and Senators also note the risks relating to the privacy of individual electors raised during this inquiry and the previous inquiry into the Electoral and Referendum Amendment (Maintaining Address) Bill 2011. Dr Roger Clarke from the Australian Privacy Foundation told the JSCEM Roundtable hearing on 29 February 2012 that he was particularly concerned about the lack of consultation about the Bill, was not aware of any privacy assessments taking place and believed that the outcome of the inquiry appeared to be predetermined
Coalition Members and Senators realise that this Bill is being introduced by Labor and the Greens solely to increase their electoral advantage, despite the severe risk it contains to the integrity of the Electoral Roll and significant concerns about individual privacy.
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll.
As outlined in the p revious report into these proposals, a 1999 report by the House of Representatives Standing Committee on Economics, Finance and Public Administration: Numbers on the Run – Review of the ANAO Report No.37 1998-99 on the Management of Tax File Numbers found that:
There were 3.2 million more Tax File Numbers than people in Australia at the last census.
There were 185,000 potential duplicate tax records for individuals; 62 per cent of deceased clients were not recorded as deceased in a sample match.
Similarly, an ANAO Audit Report (No.24 2004–05 Integrity of Medicare Enrolment Data) stated that ‘ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased’.
… the AEC would receive data from a third party data source, conduct a data matching process including a check of the eligibility of individuals to enrol, notify eligible individuals and, after a period of 28 days, make additions to the electoral roll and inform electors of the AEC’s action.
I believe part of the problem is … that there is a desire to maximise the number of people on the rolls. I do not believe that is an appropriate objective. … The intention should be to maximise people's opportunity to enrol and to vote, and this goes well beyond that.
We are not aware of any risk assessment having been performed. We were not aware of any privacy impact assessment having been performed.
The electoral roll is continuously updated, however, following the issue of the 'writ' for an election, which sets the election timetable, the roll for the election is closed. The roll for the election closes at 8pm local time on the third working day after the writ is issued and cannot be updated after that date.
I want to go back to the process. Supposing you have decided, because of your checking with your material, that Mrs Bloggs has actually moved from her previous address. Under this legislation, you would write to the new address and say, 'We have changed you', because you are satisfied that she has moved.
We would not say that we have changed it; we would write to the individual and say, 'We have information which leads us to believe that you are at this address. You have 28 days to advise us whether that is not the case.' If there were no response, then we would change the address at that point.
In their dissenting report in July 2011 to the Joint Standing Committee on Electoral Matters’ investigation into the 2010 Federal Election, Coalition members of JSCEM noted the risks of using external data sources such as the ATO, Medicare or other Government agencies to update elector details:
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll. As outlined in the previous report into these proposals, a 1999 report by the House of Representatives Standing Committee on Economics, Finance and Public Administration: Numbers on the Run – Review of the ANAO Report No.37 1998-99 on the Management of Tax File Numbers, found that:
There were 3.2 million more Tax File Numbers than people in Australia at the last census;
There were 185,000 potential duplicate tax records for individuals; 62 per cent of deceased clients were not recorded as deceased in a sample match.
Similarly, an ANAO Audit Report (No.24 2004–05 Integrity of Medicare Enrolment Data)stated that ‘ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased’
We are not aware of any risk assessment having been performed. We were not aware of any privacy impact assessment having been performed. We were not aware of consultation processed which the Electoral Commissioner has just referred to. We are not aware of the APF or any of the civil liberties organisations being involved in any of those. We have checked back through our records and confined our evidence of that in our own records.
… … …
Finally, the outcome of the inquiry does appear to be predetermined. The inquiries being held by the same committee came forward with a related proposal, and when we sought further time to address this matter we were told that, 'The committee was merely focusing on the adequacy of the bill in achieving its policy objectives.' This sounds rather less than substantive consideration of the matter.
… Mr Orr writes: 'Like other official public registers, such as land registers, a chief feature of electoral rolls is their finality. The purpose of a roll is to be a definitive statement of the entitlement to vote'—leaving aside the provisional provisions—'Thus there is a rule that the roll is conclusive evidence of the entitlement to vote. Reinforcing this is the secondary rule in almost all jurisdictions that a court of disputed returns is not to inquire into the correctness of the roll.
The Committee recommends that, wherever appropriate, the Commonwealth Electoral Act 1918 should be amended to allow the Australian Electoral Commission (AEC) to directly enrol eligible electors on the basis of data or information provided by an elector or electors to an agency approved by the AEC, as an agency which performs adequate proof of identity checks, where that information is subsequently provided by that agency to the AEC for the purposes of updating the electoral roll. Approval of such agencies by the AEC should be made by disallowable instrument.
I believe part of the problem is that the presumption is that there is a desire to maximise the number of people on the rolls. I do not believe that is an appropriate objective. The notion of the vote is a right—it is an entitlement—and turning it into an obligation, which is what that entails, I just do not believe is appropriate in a democratic process. The intention should be to maximise people's opportunity to enrol and to vote, and this goes well beyond that.
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll.
ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased.
We currently have a signature on a form with an enrolment. We have had a number of discussions in this committee and the Senate committee the AEC comes before in estimates about the difficulty proving certain electoral offences and the burden of evidence required for the DPP to take action. I am concerned that, if we move to what I am going to continue to call automatic enrolment—simply because I think it is automatic in the sense that it does not require action from an elector—we are going to lack that signature from a voter. That worried me. If there are cases of potential electoral fraud, that is one less piece of evidence the commission will have in its armoury.
You currently have a form that you can compare signatures to if, for example, people are using declaration votes and have to sign the envelope. That will not be available under these provisions.
To the Honourable The Speaker and Members of the House of Representatives
This petition of concerned citizens of Australia draws the attention of the house to the plight of Tamils in Sri Lanka.
Since independence the minority rights enshrined in the constitution has been systematically eroded. State sponsored colonisation, periodical pogroms and policies of discrimination resulted in Tamils demanding federal system of government through civil disobedience campaigns. They were met with force. Unable to tolerate this tyranny Tamil Youth took up arms. The Government unleashed a violent response and indiscriminately killed Tamil Civilians. Report of the UN Secretary-General's (UNSG) Panel of Experts revealed credible allegations of war crimes and crimes against humanity which have been committed. The government's LLRC report was rejected by many in the International Community. The ongoing exodus of Tamil asylum seekers demands an examination of the root causes of this conflict. As a country that upholds the rule of law and principles of human rights and as the chair of the Commonwealth organisation, Australia could play a significant role in finding a solution to this conflict.
We therefore ask the House to do all in its power to recommend to the Australian government to:
(a) Demand the UNSG to implement the main recommendations of the panel he established —to establish an independent, international Mechanism to monitor SL's domestic accountability process and to conduct investigations independently into the alleged violations and
(b) Support publicly the US led initiative at the current 19th session of the UNHRC.
Australians in all states are feeling the impacts of rising power prices, in large part due to the neglect and mismanagement of State Governments.
That was a difficult decision. I knew it was the right decision … I apologise for it for the hurt. But we had to do it.
We're concerned that if there is any uncertainty around a future price of carbon it will affect the ability for electricity generators to invest. And that it will also impact on their ability to offer—
… it won't be long before coffee is an expensive commodity as we shoulder carbon tax impacts across transport, power, rents and so on.
For the first time, the Government's expectations for Ministers, agencies and officials when performing duties in relation to grants administration, were clearly articulated.
That the House take note of the following document:
Renewable Energy Regulator—Report for 2011.
The urgent need for the Government to deliver budget transparency for the business community.
Based on what we know now, we are doing all the costings. All our policies are costed.
So you have found those savings you were looking for?
Yes, we have found the savings that we were looking for.
We haven't finalised any of our major policies …
The Govt publish its budget data twice a year: Can you publish your costings & program cuts? Just once?
In August last year, as the Coalition's expenditure review committee looked for potential savings, there was a leak.
A news report claimed that documents from the so-called 'razor gang'—
revealed a warning by Hockey that $70 billion needed to be found.
In fact, well-placed sources say, the documents did not contain an overall savings target at all. Hockey provided it to shadow ministers when he spoke to them in person.
And—here's the devious bit—he gave each of his colleagues a different figure.
The urgent need for the Government to deliver budget transparency for the business community.
You know what? If the fifth-biggest accounting firm in Australia signs off on your numbers it is a brave person to start saying there are accounting tricks. I tell you it is audited.
That the House take note of the report.
That the order of the day be referred to the Federation Chamber for debate.
That the amendments be agreed to.
That this bill be now read a third time.
Like other official public registers, such as land registers, a chief feature of electoral rolls is their finality. The purpose of a roll is to be a definitive statement of the entitlement to vote … Thus there is a rule that the roll is conclusive evidence of the entitlement to vote.
Reinforcing this is the secondary rule … that a court of disputed returns is not to inquire into the correctness of the roll.
The notion of the vote is a right—it is an entitlement—and turning it into an obligation, which is what that entails, I just do not believe is appropriate in a democratic process.
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll.
ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased.
… to directly enrol eligible electors on the basis of data or information provided by an elector or electors to an agency approved by the AEC, as an agency which performs adequate proof of identity checks, where that information is subsequently provided by that agency to the AEC for the purposes of updating the electoral roll.
… the AEC would receive data from a third party data source, conduct a data matching process including a check of the eligibility of individuals to enrol, notify eligible individuals and, after a period of 28 days, make additions to the electoral roll and inform electors of the AEC’s action.
We are not aware of any risk assessment having been performed. We were not aware of any privacy impact assessment having been performed … We are not aware of the APF or any of the civil liberties organisations being involved in any of those.
The Australian Labor Party is a democratic socialist party …
The reliance on external data sources that have been collated and that are utilised for other purposes does not make them fit for use in forming the electoral roll.
ANAO found that up to half a million active Medicare enrolment records were probably for people who are deceased.
Maintain an impartial and independent electoral system for eligible voters through active electoral roll management, efficient delivery of polling services and targeted education and public awareness programs.
That the question be now put.
The House divided. [18:05]
(The Speaker—Hon. Peter Slipper)
The House divided. [18:13]
(The Speaker—Hon. Peter Slipper)
The House divided. [18:30]
(The Speaker—Hon. Peter Slipper)
That this bill be now read a third time.
That this bill be now read a third time.
MySuper is a new, simple and cost-effective superannuation product that will replace existing default products. MySuper products will have a simple set of product features, irrespective of who provides them. This will enable members, employers and market analysts to compare funds more easily based on a few key differences. It will also ensure members do not pay for any unnecessary 'bells and whistles' they do not need or use.
The SG Act should be amended so only a MySuper product is eligible to be a ‘default’ fund nominated by an employer.
(b) all MySuper products are able to be nominated,
for ‘default fund’ purposes in awards approved by Fair Work Australia.
… access to sanitation is deeply connected to virtually all the MDG in particular those involving the environment, gender equality and the reduction of child mortality and poverty.
These short stories are autobiographical but I am not their main subject. Some pay homage to the people I have known and loved. Some describe unusual places and events and are a kind of testimony.
But contrary to what Halina says—
none are 'commonplace', whether her stories tell of the gentile nanny who followed Halina's family into the ghetto, the Russian soldier who saved her at the end of the war and nursed her back to health or the char ladies of Collins Street who first called the new immigrant a 'refo' before taking her into their hearts.
Adopted mother, Frieda, keeps telling the young Halina that if they survive the camps they shall have to testify until they die, but The Testimony is also a record of what comes next for the young Halina: love, a career in pathology, and 'her life's work' in human rights—pouring her energy into everything from bursaries for Aboriginal education and books for the victims of the Black Saturday bushfires to bioethics and gay marriage.
Described by the author as her last testimony before she drops off the twig—
this carefully crafted work is no straightforward autobiography but one in which the people and places Halina has known take centre stage. The thematic pieces provide jewels of wisdom from a woman who has lived a truly full—richly rewarding but also horrifically harrowing—life.
I came to Australia in October 2006 with with my mum, dad, baby sister and little cousin. My cousin's name is Adur and we brought her to Australia to be with her mum, dad, brother. She was too young to travel with them when they arrived.
When we arrived my aunt and uncle had a party for everyone because they were so happy to have Adur reunited with them.
… … …
My house in Sudan was made of mud. We had sticks at the windows but no curtains. Our beds were made from trees but they were comfortable. One bad thing was that the water would come in the house every day and it was smelly.
… … …
Sometimes I was scared when the animals came into our village. Many donkeys would come into the house to look for food. One day a rhinoceros tried to attack my mother but our dog stopped the rhinoceros. Mum got everyone into the house quickly. We had to keep the village gates closed to stop the elephants from coming in. But one day a big elephant broke the big gate to drink water from the tap.
… … …
One day I was very scared because some people broke the village gate and killed some people. Everyone was yelling and screaming and crying. My family was running with other people—we ran for two nights and one day.
In Australia I really like my school. At home I watch television and my favourite show is The Simpsons.
… … …
In the future I want to be a teacher because I want to 'know everything'—just like my mum.
Mr Laming has long touted that he "fixed Pinklands" access in the past, and that he's undertaken a decade-long campaign for a safe Pinklands entrance.
Yet, a search revealed that from 2004 to today's date there has only been one letter from Mr Laming to council relating to roads, safety or Pinklands. It's dated February this year and sent to the council's CEO … one letter in seven years, some campaign!
Do we want petty, party political squabbling in council as well? Do we really want a factionalised council run by faceless people at party headquarters? Do we want councillors who are lap dogs for the federal member? The questions are rhetorical - of course we don't.
I can assure all of Australia this: under this new tax regime Fortescue will pay much less tax.
Despite the howling of a small minority … The vast majority of our miners accept that they have a social obligation to pay their fair share of tax on the resources Australians own.
The latest OECD broadband statistics show Australia's ranking in the use of broadband remains mired at 17th out of 30 surveyed countries.
The DEPUTY SPEAKER ( Ms AE Burke ) took the chair at 09:30.
A typical working day for an air evacuation sister began at 3 am. Breakfast at 3.30 am. First flight was at first light over New Guinea before the heat of the day. Two hundred and fifty thousand POWs, servicemen and civilians were evacuated.
I was very proud to be a member of the RAAF Nursing Service Flying Unit.
Shona is happy with her achievements to date and considers a house, a dog, a paying job and a fiance as the right of any young woman of her age.
It would be naive to say bullying does not happen at our school, but we wanted everyone to be reminded that everyone deserves to be treated with dignity and respect, no matter what our differences are.
This bill, as currently drafted, will have a catastrophic impact on my business and that of many, small, independently owned, financial planning firms like mine, that cannot afford the additional and unnecessary administrative burden this legislation will demand and will place the cost of obtaining professional and objective advice from an independently owned adviser, out of reach of the average Australian family.
After advising for 30 years can I say, the proposed reforms will remove financial planning advice away from ordinary Australians and make it unaffordable.
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
Mr McNamara: Treasury provided a number of RISs in that area. I think that there were six separate RISs in that area. But we found those RISs not yet adequate. They had not met the best practice requirements.
Senator CORMANN: … My question is: why?
Mr McNamara: In regard to those RISs, essentially the impact analysis was not at a standard that we would pass.
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
Our major concern is that CSSA members will not be able to be remunerated for the work they perform once FoFA is implemented, as commissions are to be banned on both Superannuation investment and Group Insurance within Superannuation. There is no proposed model for fees to be charged for services provided on a group basis, and we believe that this needs to be addressed.
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulation, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
Once a beautiful thing, which attracted many suitors (advisors) to the industry to assist with clients' needs, FoFA now seeks to transform the industry to something less attractive to advisers to practise and more difficult to access for most people, creating a generation with ill-informed financial understanding.
The Labor Party is making a deliberate push to get money into union funds by deliberately legislating through ridiculous reforms. After advising for 30 years, can I say, the proposed reforms will remove financial planning advice away from ordinary Australians and make it unaffordable. The massive under-insurance problem we have in Australia will not be remedied by removing commission from the product. The is 99 per cent of our clients still want us to be paid via the product, rather than writing out an additional cheque.
… a thinly veiled corroboration between trade union controlled industry superannuation funds and the trade union controlled federal government to create, for the Industry Superannuation Network (ISN) a monopoly in the superannuation industry.
It does absolutely nothing towards protecting investors but goes a long way in giving a 'free kick' to the Minister for Financial Services' buddies in the union movement and the industry super funds.
The opt-in is insane; in my opinion this will be the decline of the financial planner-adviser industry, which will cause a bigger under-insurance problem than exists now.
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations than being due to regulatory inadequacy.
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations—
rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
… the product will pay us—she can't afford to. We will be paid about $800. Currently I have spent six hours on this job and it will probably get to ten by the time I am finished—my accountant would charge $3000 for this job.
FoFA reform is going to sanitise our great industry. Australians are already under insured and FoFA in its current form will worsen that position and make the ever increasing social security burden even greater—
FoFA will cause financial ruin to many advisers—
who have helped Australia survive to this point in tough global economic times, through their knowledge, skill and experience advising their clients to act rationally and not impetuously as the current Government has acted—
… where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy.
If passed without amendment, FoFA will adversely affect all Australians and their choice, as is their democratic right to quality advice … and create a monopoly for advice because only the large financial institutions (Banks and Fund Managers) and Industry Union controlled superannuation Funds will be able to afford the cost of compliance and cheap advice.
… the disproportionate increase in costs to the industry and consumers, the reduction in the number of financial advisers in Australia, the associated additional job losses and the further concentration of financial advice services providers will have detrimental impacts on the cost, availability and accessibility of financial advice across Australia.
According to the government's own Office of Best Practice Regulation, the government did not have adequate information before it to assess the impact of this bill on business and consumers or to assess the cost-benefit of the proposed changes.
Our view is that FoFA, as it is currently drafted, delivers neither improved transparency or increased access to advice. Minister Shorten has stated on a number of occasions that FoFA is a growth strategy for the financial advice industry and also that there is broad industry support for FoFA. In fact, the financial service industry has many concerns with the current draft of this legislation, much of which has been recognised and addressed in the coalition's dissenting report.
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
The key test for FoFA, which the AFA has continued to support, has always been:
1. improved transparency and
2. increased access to advice.
Our view is that FoFA, as it is currently drafted, delivers neither. Minister Shorten has stated on a number of occasions that FoFA is a growth strategy for the financial advice industry and also that there is broad industry support for FoFA. In fact the financial services industry has many concerns with the current draft of this legislation, much of which has been recognised and addressed in the Coalition’s dissenting report.
… I have found a flaw. I don't know how significant or permanent it is, but I have been very distressed by that fact.
… that’s precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.
In conclusion, FoFA, as it stands, will decimate the financial advice profession. Over 6,800 adviser jobs are at risk and over 30,000 jobs in total. This excludes the businesses they support in the communities they serve and the clients they service. A piece of legislation that inflicts this amount of damage is unacceptable.
FoFA as it stands will also increase the cost of advice to consumers.
This committee has already had evidence that FoFA will cost hundreds of millions of dollars to comply with—and this is just for the product providers at the big end of town. It will also decimate the provision of financial advice to clients in the bush and the regions. Advice will … become a service for the wealthy, and working families and lower- to middle-income Australians who really need advice will be priced out of the marketplace.
… I think there is likely to be a migration of advisers to large players like AMP. So, despite the fact that we think there is some competitive advantage in the advice industry for this legislation to companies like my own, we do not believe it is in the broader interests of the financial advice industry that there should be what we think is likely, which would be a consolidation of advisers.
Australia did not get to be the No. 1 financial services hub in the world and respected by everybody else because we were anticompetitive. I think this is an important aspect of FoFA. We have to make sure that, in our rush to protect the consumer, there is a balance between the objectives of being able to give the consumer appropriate protection and not reducing the competition that is out there in the marketplace.
Unfortunately, the legislation in its current form does not provide adequate protection to financial advice clients where 'the disclosure obligation' or 'renewal notice obligation' is not satisfied by the financial planner/licensee.
Fee disclosure statements were never part of the conversation and never part of the consultation. They jumped in at the last minute and are retrospective. They are a redundant item and will just cost endless amounts of time and money and will be one of the reasons why a lot of advisers will focus on the higher value clients at the expense of low and middle income Australians.
When I provide advice to my clients or would be clients, they are not required to pay for the advice received. If they proceed with the insurance recommended, and an application for insurance is accepted, then we receive a commission. This covers my costs and provides my remuneration. In the service I provide, I do not discriminate, be it a large client with significant needs, or a smaller client whose needs and ability to pay premiums are modest, the service provided is the same. The bigger client has needs and if asked would be able to afford a fee for my time, the smaller clients whose needs are just as important to them, may struggle to obtain advice if a fee had to be paid.
Last year a client of mine died in tragic circumstances at work. We assisted his widow with all of the necessary paperwork for the claims process. This was made much longer than was reasonable as the coroner was delayed in handing down a final decision due to delays in obtaining toxicology results. Despite this, with constant and regular follow up by our office, we were able to obtain a release of the much needed life Insurance proceeds, enabling her to own her home and get on with her life and care for her young children.
The client paid no fees at all for our work and nor should she. It's our job. Being paid commissions for new sales and on renewals of existing insurance we are able to offer a high level of service to all our clients, and when assistance is needed we are able to do so.
Platforms should be incentivised to put the most appropriate products on their menus.
The committee is of the general view that situations where investors lose their entire savings because of poor financial advice are more often a problem of enforcing existing regulations, rather than being due to regulatory inadequacy. Where financial advisers are operating outside regulatory parameters, the consequences of those actions should not necessarily be attributed to the content of the regulations.
Mr McNamara: Treasury provided a number of RISs—
in that area. I think that there were six separate RISs in that area. But we found those RISs not yet adequate. They had not met the best practice requirements.
Senator CORMANN: … My question is: why?
Mr McNamara: In regard to those RISs, essentially the impact analysis was not at a standard that we would pass.
Senator CORMANN: You say 'the impact analysis'. Can you be a bit more specific?
Mr McNamara: The impact analysis of a regulation impact statement is generally the area of the RIS that refers to the costs and benefits associated with the policy. It is the detail—the impact on business, consumers or the government. It is that sort of analysis—'this change is meant to do particular things in the economy; it is likely to have these costs and these benefits'.
Senator CORMANN: Are you saying that the government did not even have in front of it adequate information to assess the cost benefit of the FoFA regulation changes?
Mr McNamara: The government did not have an adequate RIS in front of it when it made those changes. That is true.
… … …
Senator CORMANN: … the government's proposal to introduce the mandatory opt-in requirement and the annual fee disclosure, are they the sorts of things that were not properly assessed?
Mr McNamara: Yes. There were six elements.
Senator CORMANN: Can you list those six elements for us please?
That the Parliament defer consideration of the FoFA legislation until the government has submitted a full Regulatory Impact Statement in relation to the legislation currently before the Parliament which is compliant with the requirements of the government's own Office of Best Practice Regulation.
That the commencement date of this legislation be timed to coincide with the commencement date of the government's proposed My Super changes, which are currently scheduled to commence on 1 July 2013. The commencement date should provide at least a 12 month period from the date of finalisation of all legislation and associated regulations to enable an orderly transition and implementation period.
That the Opt-in arrangements contained in the Corporations Amendment (Future of Financial Advice) Bill 2011 be removed from the Bill.
That the annual fee disclosure statements contained in the Corporations Amendment (Future of Financial Advice) Bill 2011 be prospective only as per the government's long standing commitment and that they should not apply retrospectively to existing clients on the basis that the increased costs – ultimately borne by consumers – far outweigh the questionable additional consumer protection benefits.
That the annual fee disclosure statement requirements be amended from "detailed" prescriptive information and inflexible issue rules to "summary" information only "given" at least annually to the client.
That section 961B(2)(g) be removed from the proposed Best Interests Duty to remove uncertainty about the practical operation of the Duty.
That the best interests duty in the proposed legislation be amended to explicitly permit clients and advisers to agree to limit the subject matter of advice provided in order to facilitate the provision of ‘scalable advice’.
How many departments, agencies, commissions, Government owned corporations or other such bodies have been created within the Ministers portfolio since 24 November 2007 (excluding existing departments that have been re-named or merged into a larger entity), what is the name of each such entity, and how many full-time equivalent employees did each such entity have at the end of 2011.
On 3 December 2007, the Department of Resources, Energy and Tourism (RET) was formed out of the Department of Industry, Tourism and Resources (DITR). RET falls within the portfolio of the Minister for Resources and Energy, and the Minister for Tourism.
The Australia Solar Institute (ASI) was incorporated as a not-for-profit company limited by guarantee on 10 August 2009, and falls with the purview of the Minister for Resources and Energy.
As at 31 December 2011, the full-time equivalent (FTE) employees for:
Legislation passed the Parliament in 2011 to create the Australian Renewable Energy Agency (ARENA). This entity commences operation on 1 July 2012.
(1) How many staff at each level or grade are currently employed in
(a) his department
(b) Geoscience Australia
(c) NOPSEMA
(d) Tourism Australia, and
(e) the Australian Solar Institute.
(2) What were the corresponding staffing numbers as at 1 December 2007.
(3) What is the total portfolio salaries and on-costs forecast for 2012-13.
(4) What was the actual total portfolio salaries and on-costs charge for 2007-08.
(1) and (2) The number current of staff at each level or grade and corresponding numbers as at 1 December 2007 are in the Tables below.
Table 1: Staffing numbers excluding Tourism Australia and Australian Solar Institute
* RET was formed on 3 December 2007, figures are taken at this date.
Tourism Australia maintains its own classification structure. The staffing numbers and relevant classifications are in the table below.
Table 2: Tourism Australia
The Australian Solar Institute (ASI) currently has 7 staff. The ASI came into existence in 2009 and therefore figures for 1 December 2007 are not available.
(3) The total portfolio salaries and on-costs forecast for 2012-13 are:
(4) The actual total portfolio salaries and on-costs charge for 2007-08 were:
* This amount reflects the period 3 December 2007 to 30 June 2008.
** NOPSEMA is totally cost recovered from Industry. Expenditure and staffing requirements are driven by changes in scope of Regulatory functions and Industry Activity.
*** ASI did not commence operation until late 2009.