Senate stall on advice rules

Up in the air: The Coalition is playing for time on the financial advice regulations. Photo: Quentin JonesThe Abbott government has held off tabling its watered-down financial advice rules in the Senate as it seeks to use the coming days to lobby new Palmer United Party senators for support for the proposals.

Labor senators took the unusual step on Tuesday to try to table the Abbott government’s future of financial advice (FoFA) regulations, saying the Senate needed them to be introduced so the entire chamber could consider whether or not to disallow them.

But the Coalition refused, leaving Labor to accuse the government of wanting to give lobbyists more time to ”work on” Clive Palmer and PUP senators.

The Coalition’s amended financial advice laws have fallen into disarray this week after Mr Palmer said he ”would never” support them.

The government needs the support of Mr Palmer to get its amendments through the Senate.

It has until next Tuesday to table its regulation changes.

But on Tuesday, Labor senator Sam Dastyari tried to get the Coalition to table its own FoFA regulations but it refused.

Finance Minister Mathias Cormann has repeatedly declined to say when the government will table the regulations, even though they took effect on July 1.

Senator Cormann this week said that if his regulations were thrown out then he would consider extending some requirements, such as making advisers disclose fees charged in previous years, to financial advice provided through industry super funds.

David Whiteley, chief executive of Industry Super Australia, said there was ”genuine bewilderment” in the industry on that threat on Tuesday, because intra-fund advice was offered to members of every, not just industry, funds.

Senator Cormann also ruled out any prospect of an immediate royal commission into Commonwealth Bank or the financial planning industry, saying he wanted to see how the CBA compensation scheme for fraud victims would work.

His comments follow an explosive Senate report examining the performance of CBA and the Australian Securities and Investments Commission, which recommended a royal commission into the CBA over allegations of widespread fraud and misconduct in its financial planning division. CBA apologised to customers last week for misselling financial advice.

Senator Cormann said on Tuesday that the government would ”reserve judgment” on the need for a royal commission.

”We believe that the announcement by CBA of the open advice review program does offer that opportunity, but we reserve judgment, we will monitor the way that is being implemented.”

Comments are closed.

Post Navigation