BILLS - Treasury Laws Amendment (2019 Measures No. 3) Bill 2019 - Second Reading

Mr STEPHEN JONES (Whitlam) (12:23): In my earlier contribution to this debate on the Treasury Laws Amendment (2019 Measures No. 3) Bill 2019, I gave a detailed outline of, in particular, chapter 7 of the Corporations Law, which regulates the licensing of financial advisers. It was important that I go through that background, because it sets the context for the observations I'm about to make. Labor supports the amendment, but the amendment is necessary only because of the utter shambles this government finds itself in.

The professional standards for financial advisers reforms received bipartisan support in this place back in 2017. The legislation followed a joint parliamentary inquiry into professional standards in the industry—one that, once again, had unanimous support from all members of the committee. The intent of the reforms was to ensure that all professionals who provided personal financial advice, whether they be stockbrokers, insurance advisers or financial planners, would meet the same sort of professional standards expected of other professions, whether they be an accountant, a lawyer, a medical practitioner or any of the other recognised professions.

The standards, which are set out by the independent Financial Adviser Standards and Ethics Authority, hereafter FASEA, include requirements for advisers to meet education standards, pass a professional exam, to have professional experience and to meet continuing professional development requirements. These are all reasonable requirements. Most importantly, they require financial advisers to be able to abide by a clear, professional code of ethics that ensures that they act in the best interests of their customers. I'm sure that most financial advisers already do abide by a very high ethical standard, but it is quite clear from the findings of the Hayne royal commission that there have been far too many instances of advisers failing to meet that benchmark. So these reforms were sensible and reasonable, and, to be frank, I was surprised to see the Liberal National government support the regulations back in 2015.

The original legislation included generous transition arrangements for existing advisers. I want to go through them, because we're amending those already very, very generous transitional arrangements. Under the original 2015 announcement, existing financial advisers would have until January 2021—nearly four years after the passage of the original legislation—to pass a professional exam. I repeat that: it was 2015 when they were put on notice and 2017 when it was enacted, so for nearly four years they were put on notice that they would have to pass a professional exam. And, nearly seven years after the passage of the legislation, they would have the opportunity to update their professional educational qualifications to meet the new requirements.

At the risk of being repetitious, I also want to point out that this is 11 years since the Ripoll committee made its original recommendations—a report that I know you're very familiar with, Mr Speaker. This is eight years since the Future of Financial Advice reforms, which were first ushered in by the member for McMahon and then the member for Maribyrnong, against full-throated opposition from those opposite. It's five years since the announcement, yet still they could not get it right—so, at the harshest, five years, at the most generous, 11 years. You've had 11 years to get that right, and you still couldn't get that right. The horror show has unfolded since then under the leadership revolving door and the cavalcade of Liberal ministers, treasurers and assistant treasurers—the latest one, sitting across the table at the moment, has apparently made these timelines unreasonable.

It gets worse: the independent body, established by the former minister for financial services, has been through three different CEOs in its first 18 months. Perhaps that is a sign of confidence in the overseeing minister! The consultation with the industry itself has been almost entirely absent for the first of those 18 months. Standards were issued mere days before they were due to come into effect, and the FASEA exam, as the minister pointed out in his second reading speech, wasn't in a location which was going to make it even possible for a large swathe of financial advisers to be able to attend and sit that exam, let alone pass it. This is monumental incompetence, incompetence on an Olympic scale.

So, yes, we will support the legislation. But in doing so, we have to point out incompetence and mistake, incompetence and mistake, minister after minister after minister, which has visited this great uncertainty upon an industry which is already going through considerable upheaval. We will support the legislation. I foreshadowed in this second reading speech that I'll have a substantive amendment to make, which will go to the substance of these laws, but I urge all honourable members of this place to support the second reading amendment as well as the bill before the House. I move:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House criticises the Government and the responsible Ministers for their mishandling of and delays to the reforms to professional standards for financial advisers, resulting in significant uncertainty for both members of the industry and consumers".

The SPEAKER: Is the amendment seconded?

Photo of MPMr Bowen: It certainly is.

The SPEAKER: Can you actually say, 'I second the motion'?

Photo of MPMr Bowen: I don't hesitate to say, 'I second the motion.'

The SPEAKER: Thank you very much. The original question was that this bill be now read a second time. To this the honourable member for Whitlam has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The question now is that the amendment be agreed to. I call the member for Bowman.