In an age of uncertainty, at least one thing is for sure: whatever the outcome of the federal election next weekend, there will be a new minister overseeing financial services policy.
The unexpected resignation of Minister for Financial Services Stephen Jones from politics at the election means that whichever party forms government after 3 May will need to appoint a new individual to oversee the portfolio, whether as an Assistant Treasurer, specific financial services minister or both (like Jones was).
The next Parliament will inherit a number of contentious matters relating to financial services, including completion of the post-Quality of Advice Review reforms expanding access to financial advice, implementation and funding of the much-maligned Compensation Scheme of Last Resort and – potentially – the “super for housing” policy advocated by the Coalition. As such, the identity of the next minister will have enormous influence over the trajectory of the industry, and the rules and regulations it is subject to (or isn’t).
So, who are the prime suspects – and what might their tenure have in store?
- Labor candidates
If the Albanese government is returned, it will need to swiftly appoint a new minister from within its ranks. And regardless of the individual, they will be on a steep learning curve given how much change has occurred in this area over the decade since Labor was last in office, and the fact the government has chosen not to appoint a replacement before the election, which would have given them a few months’ crash course.
Sources with knowledge of the complex factional arithmetic on the Labor side of politics inform this column that, mathematically, the candidate must come from the Left faction. That makes Jenny McAllister, a NSW senator and currently the Minister for Emergency Management and Cities, as the most likely Labor candidate for the job. McAllister is seen as a close ally of consumer groups and was a vocal advocate in Parliament for the introduction of the Future of Financial Advice laws banning investment commissions and introducing a best interest duty for advisers.
She is therefore likely to be more sceptical of her predecessor’s willingness to entertain some of the deregulation efforts implicit in the Delivering Better Financial Outcomes legislation. She is described by a right-leaning source as the “worst nightmare” candidate for the industry (or at least those within it who favour a reduction in regulatory compliance measures). But others describe her as a high-integrity conviction politician who could shake things up by turning attention to some of the dormant conflicts of interest that remain in the industry.
Though the position is notionally attributed to the Left, politics is an inexact science. It is plausible, with some horse-trading, that a candidate from the Labor Right might emerge as minister, and the most likely candidate on the Right is Andrew Charlton, the MP for the western Sydney seat of Parramatta.
Charlton came to prominence as a key adviser to then-Prime Minister Kevin Rudd during the Global Financial Crisis. He is highly financially literate, with a PhD in economics from Oxford and a successful business career as founder of consulting firm AlphaBeta, which he sold to Accenture in 2020. A snap poll of attendees of the Professional Planner Advice Policy Summit in February listed Charlton as the most popular choice to replace Jones as minister. He could likely get across one of the most notoriously complex portfolios quite quickly. But many sources say the ambitious up-and-comer, who was only elected to Parliament at the last election, will have to wait a bit longer for a seat in the outer ministry.
Daniel Mulino, MP for the Victorian seat of Fraser, has also been touted as a potential candidate from Labor’s Right faction. He is chair of the House of Representatives standing committee on economics and therefore fluent in many of the debates pertaining to financial regulation and the financial services industry. An economist and lawyer by background, he is also seen as relatively business-friendly.
Another plausible candidate is ACT MP Andrew Leigh, who was the Albanese government’s assistant minister overseeing competition and charities in its first term. Leigh introduced the first tranche of the DBFO legislation when Jones was on personal leave and has long had an interest in the portfolio. However, the fact he is factionally unaligned is said to have hurt his chances.
- Coalition candidates
If the federal opposition wins the election, Luke Howarth, the current shadow minister, would be the frontrunner for the job. After a relatively slow start in which he kept a low profile in the industry, Howarth has begun to hit his stride and looks increasingly comfortable in the role as he has built up both subject matter expertise and personal relationships.
He has courted – and in some cases won over – the financial adviser constituency through his effective criticism of Jones and Labor over the CSLR debacle and willingness to consider reducing the caps on insurance product commissions. For example, the Association of Independently Owned Financial Professionals has endorsed Howarth and the Coalition despite coming out strongly for Labor at the last election.
However, he has also proved to be relatively centrist on superannuation policy (at least compared to his colleague Senator Andrew Bragg). Though he has disclosed his unsurprising affinity for SMSFs and has been a critic of links between industry funds and trade unions, Howarth has also publicly praised AustralianSuper and the Super Members Council.
But Bragg himself cannot be discounted as the next minister. As a former head of policy at the Financial Services Council he is certainly the most knowledgeable in the Coalition about the technical detail of the portfolio. Some sources suggest the likelihood is low given he is a member of the party’s Moderate faction and out of step with the more conservative Dutton frontbench. But he has been given a high-profile portfolio of “home ownership” during the election, which is seen as an endorsement of his competence in the boss’ eyes.
Even if he isn’t Minister for Financial Services, Bragg will be seen by many as a de facto spokesperson on the topic and, if his time in government in the past is anything to go by, he will be unlikely to keep quiet on his pet topic of superannuation regardless of his day job.
His appointment would be a nightmare scenario for industry super funds, which he has described as “corrupt” and called for the heads of their senior executives “on spikes”. It would be a sign that Dutton and likely Treasurer Angus Taylor are not interested in a truce in the super wars.
However, there is a potentially even worse scenario for the industry funds movement, with outspoken former MP and longtime super warrior Tim Wilson attempting to regain the bayside Melbourne seat of Goldstein from his teal disruptor Zoe Daniel.
An outside chance for the job is Forde MP Bert van Manen, a former licensed financial adviser before he entered politics. His tenure would be welcomed by the advice profession, which – van Manen himself told the Professional Planner Advice Policy Summit – has not always been an able advocate for its own cause.
But even though he has served as Chief Opposition Whip since 2022, a leap into a Cabinet position is probably unlikely for an MP who hasn’t yet served in the outer ministry.
- Greens or crossbench candidates
With experts and betting markets tipping a very possible hung parliament, you also can’t discount the possibility of a Green or independent candidate taking the position, although the former is pretty much unthinkable if the Coalition wins the election.
If it were a Green, however, you’d have to imagine Tasmanian senator Peter Whish-Wilson would be gunning for it. He has an unusual pedigree for an environmentalist as a former Merrill Lynch and Deutsche banker on Wall Street in a past life.
But that hasn’t made him an ally to those who favour deregulation of financial services. He was a hardline campaigner for the Hayne royal commission and advocate for compensation for victims of poor financial advice, and has called for the big four banks to be broken up.
Independent Allegra Spender, who represents Sydney’s affluent eastern suburbs, could be another dark horse candidate in the case of a minority government held up by the so-called Teals. Spender last week told a Financial Advice Association Australia forum that implementing advice reform and fixing the CSLR are “urgent” issues that needed to be solved for the profession.
And, of course, it could be a candidate that comes totally out of the blue. In our Westminster system, it is the Prime Minister’s prerogative to choose his or her team (although the factional warlords do hold some sway).
It certainly wouldn’t be the first time political experts (or journalists for that matter) got it wrong.
