One of the more interesting moves in the new Turnbull government is the appointment of Kelly O’Dwyer as both Assistant Treasurer and Minister for Small Business.
The Treasury and small business portfolios overlap in financial planning, and sometimes reveal competing priorities. A very significant number of financial planning practices are small businesses which might expect to be championed by the Minister for Small Business; but there is no doubt that they may be adversely affected by changes aimed at raising financial planners’ professional, ethical and education standards – all of which fall under the Assistant Treasurer’s purview.
In Josh Frydenberg, the financial services industry had a minister whose consultative approach to complicated and sometimes contradictory policy priorities stood in stark contrast to the broader approach often taken by the Abbott government. Frydenberg was clear in his intentions and deliberate in his actions, and while not every interest group got everything it wanted, Frydenberg was respected for leaving them in no doubt as to where they stood.
A fine line
Frydenberg walked a fine line between the natural Liberal inclination to deregulate and minimise red tape on business, while recognising that markets can only operate truly efficiently when consumer protections are not eroded.
Wearing one hat, O’Dwyer is responsible for the government’s responses to the Financial System Inquiry (FSI), a Parliamentary Joint Committee (PJC) inquiry, and the Life Insurance Framework (LIF). A number of these responses will improve consumer protection by requiring financial planners to meet higher minimum standards.
Wearing the other hat, O’Dwyer is responsible for policy and regulation affecting the small business sector, and for ensuring that the so-called “engine room of the economy” is fit, robust and healthy and is not impeded by unnecessary red tape.
The latter consideration requires both a strong consumer protection framework to promote confidence, and financial planning businesses that are profitable and robust and able to operate without conflicted remuneration or corporate structures. Already O’Dwyer is coming under pressure: the Financial Services Council (FSC) has urged her to act quickly to remove uncertainty surrounding reform of life insurance; consumer advocacy group CHOICE called for improved consumer protection through the government’s response to the FSI.
It’s early days yet, and a new cabinet always takes time to bed down (it will also become clearer, over time, what the difference is between an assistant treasurer and a minister assisting the treasurer). But how well O’Dwyer balances the competing priorities of two portfolios will define not only how she is assessed compared to her predecessors, but ultimately how financial planning is able to develop as a profession in Australia, and how effectively more people are confidently able to access to high-quality and affordable financial planning services.
