FOFA and Cooper Review sidelined by election

With the Federal Election campaign now approaching the halfway mark, Mike Taylor notes that there has been precious little discussion about financial services, the Future of Financial Advice or even the Cooper Review.

With the major political parties now into their third week of campaigning for the 21 August election, the financial services industry has every right to feel neglected. Apart from a few references to lifting the superannuation guarantee, the industry has barely rated a reference.

At least a part of the silence on financial services policy issues is probably attributable to the fact that the Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, has emerged as one of the Australian Labor Party’s key campaign spokesmen.

Thus, rather than talking about his portfolio areas, Bowen has spent the majority of the campaign so far talking about campaign issues and putting out the increasingly frequent spot fires surrounding leaks about who might have said what in Cabinet meetings, particularly with respect to paid maternity leave and increasing pensions.

For its part, the Federal Opposition has been similarly silent on financial services, with its only reference being to what it claimed was the Government’s guilt in re-announcing policy with respect to superannuation, and that statement was not even uttered by its Financial Services spokesman, Luke Hartsuyker.

Instead, it was left to the Shadow Finance Spokesman, Andrew Robb, to claim that a Labor media release on workers entitlements had misled voters in claiming a Gillard Government would take strong action to make sure employers did the right thing on superannuation and then referencing the fact that employees would receive information on the pay slips about the amount of superannuation actually paid into their accounts.

Robb said this information was already part and parcel of the superannuation and industrial relations regime, with Fair Work Act regulations making the provision of such information compulsory.

“The fact that Julia Gillard has tried to pass off existing policy as new policy shows that the Gillard Government is just as addicted to spin as the Rudd Government was,” he claimed.

However, while the Federal Opposition thought the changes announced by the ALP were old news, this was not the case where the Association of Superannuation Funds of Australia (ASFA) was concerned with its chief executive, Pauline Vamos, welcoming the announcement.

She said thousands of Australian workers, representing the most vulnerable cross sections of the community, were missing out on millions of dollars in unpaid superannuation guarantee contributions and that the provision of more information represented a very important step.

“Australia has a reputation globally for a high level of compliance by employers in paying the superannuation guarantee,” she said.

“The Australian Taxation Office monitors compliance and shows around 90 per cent of employers are fully compliant. Most of the remainder are non-compliant some of the time, or only for some employees.

“Around 97 per cent of employees are paid their correct superannuation guarantee entitlement, but our goal must be 100 per cent to get the correct amount of superannuation guarantee paid on time,” Vamos said.

“We urge both sides of politics to consider a range of enhancements to the superannuation entitlements of Australian workers,” she said.

Apart from this entry into the political debate, the major organisations servicing the financial services industry have remained remarkably silent since the federal election campaign was called with neither the Financial Services Council nor the Financial Planning Association feeling disposed towards commenting on political issues.

That is not to say that they have been silent through the period, it is just that they have chosen not to enter into the areas being discussed by the two major political parties.

With just over three weeks’ to go before Australians are asked to make their decision, one or other of the major parties can be expected to say something about financial services and this, in turn, may give rise to a response from the industry.

In the meantime, the Cooper Review recommendations and the proposed Future of Financial Advice changes seem to have been left to gather dust.