Election first, new legislation later

The Federal Government is unlikely to get its legislative changes to Australia’s financial planning industry in place before the next Federal election meaning the final shape of the new regime will ultimately depend on the make-up of the new Parliament.

While the Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, outlined the Government’s policy intentions in response to the findings of the Parliamentary Joint Committee into financial services, the Federal Opposition has signalled it is not so ready to abandon commissions-based remuneration.

The Opposition spokesman on financial services, Luke Hartsuyker, argued that the abolition of commissions would have the effect of making financial advice more expensive for many Australians, while the Opposition Leader, Tony Abbott, expressed similar concerns.

While the Parliamentary Joint Committee report tabled in the Parliament by chairman Bernie Ripoll last year carried bipartisan support, the changes announced by Bowen are regarded as going further than the broad thrust of the Ripoll recommendations.

As well, media suggestions that the Government’s announcement represented a victory for the Industry Super Network combined with the strident rhetoric of industry super fund spokesmen are likely to harden the Opposition’s resolve to oppose some elements of the Government’s proposals.

The degree to which the final legislative package ultimately reflects Bowen’s announcement might therefore depend on which party wins the next Federal Election and by how much.