Senator Mathias Cormann says regulators should not take their responsibility to Parliament lightly or pay lip service to it by treating Parliamentary oversight as a game of ‘hide and seek’.
Speaking at the Financial Services Council (FSC) Conference at the Gold Coast Convention and Exhibition Centre yesterday, he urged regulators to take their independence seriously so they can administer laws objectively and impartially without inappropriate influence from government.
“Regulators should not take their responsibility to be accountable to Parliament lightly or just pay lip service to it by treating Parliamentary oversight as a game of ‘hide and seek’,” Cormann said.
“In opposition the Coalition has sought to make regulators accountable when they appear before Parliament.
“In government we would seek to reinforce that APRA and ASIC remain committed to the accountability framework contained in the statements of intent and expectations that they have previously committed to under the Howard government.”
Cormann also sought to illustrate how far current financial reform had strayed from the Howard Coalition government’s FSR reforms.
“The FSR principles facilitated innovation and growth in the financial services sector, provided appropriate levels of consumer protection and enhanced financial safety and market integrity,” he said.
“Sadly, Labor has departed from these FSR principles of a competitively neutral regulatory system.
“Instead Labor in government has presided over a series of ad-hoc piecemeal changes that have favoured some groups over others, discriminated between product classes and distorted capital requirements across the industry.
“Labor’s version of intra-fund advice favours superannuation fund advice providers over other financial advice providers by applying a differential regulatory regime which allows for the cross-subsidisation of advice fees.
“The provision of life insurance under FOFA is highly confusing and will make it difficult for an adviser to act in their client’s best interests.
“Individually written policies inside and outside superannuation are excluded from the ban on conflicted remuneration while group superannuation policies, whether within MySuper or in the choice environment, are included in the ban.
“This does not create a competitively neutral structure for the insurance industry or advisers and instead introduces unnecessary regulatory risk.
“Under Labor capital requirements across the industry have become uneven, disjointed and reflect form rather than substance.”
Cormann added that, if it forms government, the Coalition would recommit to the competitive neutrality principles that were enshrined in FSR.
