FOFA bills fail best-practice test
The Federal Opposition has renewed its calls for the Government to conduct a proper and appropriate regulatory impact statement on its Future of Financial Advice (FOFA) legislation, following evidence given to the Senate Estimates Committee by the head of the Office of Best Practice Regulation (OBPR).
According to the shadow Minister for Financial Services Senator Mathias Cormann, the OBPR evidence confirms the Government has failed to properly assess the impact of its FOFA changes on businesses and consumers.
He said OBPR head Jason McNamara had told the committee the Government's regulatory impact statements did not have enough information about the impact on businesses and consumers, and the cost benefit of the contentious parts of FOFA, for the Government to make informed decisions.
Cormann said that, specifically, the government had failed to properly assess the impact on businesses and consumers of factors such as opt-in risk commissions inside superannuation, the accountants' exemption and the carve-out of simple products.
"It is not good enough for [Financial Services Minister] Bill Shorten to just press ahead with changes like opt-in and his ill considered and ever-changing proposal to ban commissions on risk insurance inside superannuation," Cormann said.
"He should not be allowed to press ahead with his vested interest agenda to make Australia the world leaders in financial advice red tape without going through proper process."
He said the OBPR had also never even been asked to assess the Government's latest proposal to retrospectively impose additional annual fee disclosure requirements on financial advisers.
"The least people should be able to expect is that the Government will comply with its own process requirements before pressing ahead with changes the industry says will cost $700 million to implement upfront and $350 million a year thereafter," Cormann said.
"Bill Shorten must commission a proper Regulatory Impact Statement, which complies with the Government's own best practice regulation requirements, before pressing ahead with his flawed FOFA legislation," he said.
"If he refuses, the Parliament should insist on a proper Regulatory Impact Statement before dealing with any of the FOFA Bills."
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