The Quality of Advice Review consultations currently being undertaken by the Federal Government are receiving less than rave reviews from industry participants, and, frankly, they are right to be miffed.
What should be a consultation process that ought to provide government with feedback on which it should act appears to be perfunctory, mechanical, and consultation only for show.
Complaints from various sources indicate that suggestions for improvements or concerns are not being taken as seriously as industry participants believe they should, and this is never good news for any government seeking to reform financial services regulation, taxation or any part of the professional services sector.
Any prudent government should aim to ensure that consultation processes allow for fair and reasonable feedback to be provided and acted upon to ensure that the law is both good law, practical law, and that the law ultimately has the buy in of those impacted by it.
This is actually the kind of practice the government itself requires of its public services through the work of the Office of Impact Assessment.
The OIA is probably of more interest to regulatory nerds than general folk, but it plays an important role in setting guidelines for policy impact assessment.
It sets out the need to consult stakeholders impacted by a proposed law, and, more importantly, sets down the rationale for consultation in readable terms.
A consultation such as the one financial services professionals have been involved in, for example, has the purpose of fleshing out various concerns from a sector. It is about getting further feedback from a sector as a legislative proposal is more refined, but the impact analysis guide does make the point that dissenting views need not be incorporated into final proposals.
“Agencies should explain the objectives of the consultation process and the context in which consultation is taking place – be careful to explain when and how the final decision will be made and what is and is not on the table,” the policy impact analysis guide said.
“Feedback should be welcomed and responded to, even if it is not adopted. Dissenting views need not be accommodated, as long as they are dealt with respectfully.”
This raises a series of questions that need to be reflected upon by any relevant minister, their office, and their respective departments because consultations where dissenting views are not accommodated can turn problematic later.
What allowance does a government department or a ministers’ office make for genuine concerns from practitioners? Is there any real consideration of the impact of red tape and thoughts about simplifying paperwork?
A consultation that does not take heed of genuine concerns and modifies proposals can end up with legislation that ends up being fought over in Parliament and amended.
What must also be remembered is that consultations can be exercises in intelligence gathering for other purposes.
A government may not act on well-founded concerns because it has its mind stuck in neutral but what it could use negative or alternative feedback for is to develop messaging that counters industry criticisms.
Consultation processes during which concerns are expressed give government ministers ammunition when they work the media circuit. There is nothing easier for political players right now to brand professionals and professional services firms as being self-interested.
The attention on the ‘big four’ accounting firms and other large consulting practices almost guarantees the potency of that line of argument – the trendy phrase always gets the headlines.
Some consultation processes are confidential, and this makes it difficult for anybody that is a representative of a membership body to consult on proposals with actual practitioners in the field.
The tightening of confidentiality rules since the PwC confidentiality breach was revealed means that a policy expert needs to be on the ball and ready for anything in a confidential consultation.
There are also circumstances where no consultation takes place such as the Tax Agent Services Act amendments that relate to dobbing in a fellow tax practitioner and appointments to the Tax Practitioners Board.
No industry consultation took place before the Australian Greens and Minister for Financial Services Stephen Jones cut a deal and nor was there an explanatory memorandum written to accompany the proposed changes, so they are understood.
The TPB must now deal with drafting guidance to implement the new law so that there is a sensible application of legislation that was not subject to proper due diligence.
Coalition Senator Jane Hume, and Jones’ predecessor, has criticised the government for procedural tardiness that has in her view made it difficult for people impacted by laws to be able to trust government policy making.
“Introducing poorly prepared legislation, avoiding legislation committee processes, short turnaround times on exposure draft consultations, and layering regulations upon regulations without any impact assessment or subsequent review means that business cannot have the certainty it needs when dealing with the Government,” Hume told Professional Planner in a statement.
Hume’s list of procedural calamities accords with that of a range of sources within professional associations that have expressed concerns government processes.
One final thought needs to be entertained here: every person who is a financial services provider, tax agent, accountant or auditor has a vote and also has clients that presumably cast a ballot.
Does anybody in government actually think of the political cost of upsetting professional services providers and their clients by stuffing them around with poorly thought-out legislation?
