19 July 2021

The Government’s proposed compensation scheme of last resort for victims of financial misconduct is four years late and way short of the mark.

This explains why it tried to bury its release it late on Friday.

Scott Morrison and Josh Frydenberg have rejected the Hayne Royal Commission recommendation to set up a bona fide scheme.

Compensation will be capped at $150,000, just a third of the $550,000 recommended by Commissioner Hayne (Recommendation 7.1).

It also excludes court determinations from the scheme, going against Commissioner Hayne’s specific advice in his final report.

Scott Morrison and Josh Frydenberg have missed every deadline they set themselves since they commissioned the Ramsey Review in 2017 to address the broken dispute resolution system for the financial sector.

That’s four years of limbo for victims of financial collapses and rip-offs.

That’s four years of uncertainty for the industry.

And that’s four years of giving a green light to these con-artists to continue to ply their trade.

Once again, this Government’s commitment to implementing the Royal Commission’s recommendations must be called into question.

They have consistently watered-down Commissioner Hayne’s recommendations to the great disadvantage of ordinary financial services consumers.

This includes moving to undermine the Commissioner’s very first recommendation, to keep in place responsible lending obligations on banks.

Josh Frydenberg and Scott Morrison always fight to reduce cost of wrong-doing in the financial sector.

But they will never fight for strong protections for ordinary Australians deserve and expect when they seek financial advice.