Labor leaving a messy legislative legacy

With the Federal Budget, end of financial year and Federal Election looming, the financial planning industry is still facing a number of critical legislative loose ends. 

We are now barely three weeks’ away from the tabling of the Federal Budget, around eight weeks’ shy of the end of the financial year and less than five months’ short of the Federal Election scheduled for 14 September, yet the financial planning industry remains subject to numerous legislative loose ends. 

As the Financial Planning Association (FPA), the Association of Financial Advisers (AFA) and the Financial Services Council (FSC) have made clear, financial planners and others operating in the financial services industry are facing the implementation of key Commonwealth legislation without knowing its final  regulatory content. 

That legislation is the Future of Financial Advice (FOFA) changes, the Tax Agent Services Act (TASA) and the Stronger Super initiatives.

Further, on all the available evidence, there are too few Parliamentary sitting days remaining before the election for all of the legislation to be passed let alone be translated into regulation. 

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And no one should blame the regulators for this legislative/regulatory quagmire. Responsibility resides with the relevant ministers and their departmental officers.

It is no secret that the capacity of the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) to generate regulatory frameworks has been constrained by the pace of the Government’s legislative time-table. 

The bottom line, however, is that with mere weeks to go before the end of the financial year and the due date for the start of the FOFA changes, financial planning firms and individual financial planners are still having to make assumptions about the final shape of the regulations under which they will have to work. 

Similarly, as the FSC’s Cecilia Storniolo has pointed out, the next time the industry will see the TASA bill and accompanying regulations is expected to be when they are tabled in Parliament during the last two weeks of June “just in time for the commencement on 1 July 2013”. 

Then, too, there is the unfinished legislative and regulatory work around the Stronger Super changes and the disagreements which are already emerging around the manner in which APRA is approaching the processes for approving MySuper products. 

It remains to be seen how much of the Government’s financial services industry policy agenda is actually translated into legislation and then regulation before the Federal Election, but it seems very likely that a considerable body of work will remain unfinished when the Government goes into caretaker mode and election campaigning gets properly underway. 

The bottom line for the Government is that history is unlikely to view its legislative efforts favourably. Many of the underlying objectives may have been sound but the execution has been shambolic.