Even other members of Parliament aren’t entitled to knowing who is involved in the behind closed doors consultations of the Delivering Better Financial Outcomes legislation.
Asked by Coalition Senator Andrew Bragg during a Senate Economics Legislative Committee hearing on Wednesday evening, Treasury assistant secretary for advice and investments Andre Moore confirmed the latest DBFO consultations have been under non-disclosure agreements.
However, he couldn’t disclose who had specifically been involved.
“We’ve consulted confidentially with the full spectrum of stakeholders that are heavily engaged in the development of this legislation,” Moore said.
The government’s shift towards closed door meetings has been a marked departure from its earlier approach of open consultations on the Quality of Advice Review and comes as Professional Planner launches the new Advice Policy Summit in February to offer a forum to continue to publicly discuss crucial reform in the sector.
Asked by Bragg about the involvement of super funds in the closed-door meetings, Moore confirmed they were involved but again couldn’t confirm who or how many.
Moore also couldn’t specifically confirm if it included any representation from troubled profit-to-member industry fund Cbus, who have been a key target of Bragg’s inquisition, particularly in light of the connections it has with the disgraced Construction, Forestry and Maritime Employees Union.
The clandestine approach to industry consultation has improved the speed of the reforms, with Moore confirming the department was yet to have a completed draft of Tranche 2 of the DBFO bill.
“We’re at the legislation development phase right now,” Moore said.
“[Minister for Financial Services Stephen Jones] indicated that he wanted to progress the bill in this term of Parliament and we’re continuing to work to those time frames. The next stage will be an exposure draft legislation, we’re working on developing that.”
Tranche 1 was passed in July after delays due to drafting errors and conflicts over the content of the bill, particularly in regards to controversial changes to section 99FA of the Superannuation Industry (Supervision) Act which the advice profession argued would place undue pressure on super funds to check every Statement of Advice.
After Labor won the 2022 federal election which gave Jones the financial services portfolio, the minister chose to allow the Quality of Advice Review, led by Allens partner Michelle Levy who was appointed by the previous Coalition government, to continue uninterrupted and would not weigh in on the policy specifics until he received the final report in at close of 2022.
Jones released the final report for consultation in February 2023, offering its initial response in June 2023 and complete response by year end.
But this strategy left the government with a year to pass legislation which has seen only four of the QAR recommendations passed and with few sitting days left before an election will be called.
The opposition has capitalised over discontent with the government’s reform process, with Shadow Minister for Financial Services Luke Howarth and fellow Liberal MP Bert van Manen introducing legislation earlier this week to replace Statements of Advice with Letters of Engagement and Records of Advice.
The Coalition’s bill seeks to replicate the Quality of Advice Review recommendation to repeal the requirement to produce an SOA, albeit with their own tweaks on what QAR lead Michelle Levy suggested.
A spokesperson for the minister earlier in the week wouldn’t confirm if the government would consider the opposition’s bill, instead backing their wider ranging reforms package.
Unlike the opposition’s bill which only focused on SOAs, the government’s bill is expected to also include the removal of the Safe Harbour Steps, as well as the introduction of a second tier of financial adviser.
“The government’s reforms are a package which will reform the financial advice framework as a whole,” the spokesperson told Professional Planner on Monday in response to the Coalition’s bill.
“It will provide certainty to stakeholders and better affordability for consumers without compromising quality.”
