FAAA’s CSLR FOI quest gleans not much

The Financial Advice Association of Australia (FAAA) has expressed frustration that its freedom of information (FOA) efforts around the Government’s handling of the Compensation Scheme of Last Resort (CSLR) have borne minimal information.

FAAA chief executive, Sarah Abood took to social media to express the organisation’s frustration and said on the basis of the information provided to the FAAA ”it appears that either effectively no analysis was done” on the likely cost of the CSLR”.

She acknowledged that despite months of efforts on the part of the FAA little had been revealed.

“So what did the FOI documents reveal?” Abood said in an article published on the FAAA website. “The answer is, virtually nothing. The 43 page document includes correspondence going back as far as 2017, however there were no numbers of relevance. Only one document related to the legislation was tabled, and it has been largely redacted. This is hard to believe, in the context of the exploding Dixon Advisory scandal, and considering that the government had made meaningful changes to the previously drafted legislation, including doubling the sector cap for the financial advice sector, and paying for only three months of the scheme’s operation instead of one year.

“It appears that either effectively no analysis was done of the cost of the CSLR for the financial advice profession, or that steps have been taken to avoid disclosing what was done. This is a totally unsatisfactory outcome.  We expect the Government and the Parliament, when proposing legislation with broad implications, to go through the proper process and do the work necessary to understand what impact it will have.

“In actual fact, the likely cost of the Dixon Advisory failure alone appears likely, at this point, to exceed $338m, with the financial advice profession footing a bill of around $135m, on current estimates. The Dixon Advisory issues were well known at the time this legislation was introduced to parliament, and yet no attempt was made to cost these, and no mention of the Dixon Advisory failure was made in the Explanatory Memorandum that accompanied the Bill.”

“We are deeply disappointed by both the Impact Analysis and the Freedom of Information processes. We are calling for the government to acknowledge the scale of the exposure the financial advice profession faces and undertake an urgently needed review of the CSLR legislation, to ensure that the CSLR is fairly and sustainably funded.”

“ We expect much more of our Government. We all should expect much more,” Abood’s article said.