The Coalition has pledged to introduce an omnibus financial services bill that would include advice reform within 100 days should they win the Federal Election on 3 May.
In a speech to the National Press Club, Shadow Treasurer Angus Taylor gave the post-Budget reply address outlining the Coalition’s electoral policies.
“I announce that the Coalition will introduce the Securing Australia as a Financial Service Centre bill, within 100 days, following the election,” Taylor said in his address on Wednesday afternoon.
“The bill will legislate key financial service reforms that Australia has failed to prioritise, ranging from payment system reforms, digital assets regulation and restoring our financial advice profession.”
In an accompanying media statement released later in the afternoon, Shadow Minister for Financial Services Luke Howarth said there is a “litany” of financial services reforms the Albanese Government has promised “but let fall by the wayside”.
“The Coalition will act quickly to cut red tape and provide much needed regulatory certainty,” Howarth said.
However, at the Professional Planner Advice Policy Summit in February, Howarth conceded some fault lay with the previous Coalition government around the regulatory burdens placed on the industry.
While Howarth criticised the way that Minister for Financial Services Stephen Jones had handled reforms, he conceded the Coalition should take partial responsibility.
“Some of this has come from our own side,” Howarth said.
“At the end of the day, I look back and wonder how we let some of this happen.”
Wednesday’s proposed bill will legislate key financial service reforms that the Labor government has failed to prioritise, according to Taylor. However, the Shadow Treasurer didn’t add further information on specific advice reforms.
“Our financial system is the nervous system of our economy,” he said. “At best, it supports Australians to fulfill their dreams and realize their aspirations.”
While in opposition, the Coalition has pledged to implement the Quality of Advice Review in full, as well as to limit the financial impact of the Compensation Scheme of Last Resort, and to reinstate the previous Australian Taxation Office interpretation of Reduced Input Tax Credits on advice fees.
The RITC allowed funds or platforms to claim a rebate from the GST applied to financial advice fees from 2.5 per cent to 10 per cent. This meant that when a $1000 advice fee resulted in $100 of GST, the RITC would return $75 therefore resulting in a net payment of $1025 instead of $1100.
In January, Howarth pledged to fix the CSLR and bring down the mounting costs facing the financial advice industry by halving the subsector levy cap currently at $20 million a year.
“The Coalition will act quickly to fix the CSLR and get costs down for advisers,” Howarth told Professional Planner.
“The CSLR needs to be a genuine ‘last resort’, not something that foots the bill when a parent company wants to shed its liabilities. This goes beyond the Dixon backlog and we need to make sure this situation can’t happen again.”
Howarth strongly criticised the Australian Financial Complaints Authority’s “but for” approach for awarding determinations to consumers and said the government should intervene to limit these claims paid for by the CSLR.
The controversial provision, which makes up 80 per cent of claims, has been criticised by the wider profession.
Last November, both Minister for Financial Services Stephen Jones and Howarth laid out their election pitches to the advice industry well before the federal election was called in an address to the AIOFP Conference in Canberra.
Howarth said the Coalition wanted to be “a government that respects your professional judgment and gets out of the way”.
Jones, who later announced his retirement, said he believed the best chance of getting the legislation already in the works through Parliament was with a Labor government.
At the time, the Newspoll had Labor and the Coalition deadlocked in a 50-50 heat based on the two-party preferred vote.
