Labor’s financial services report card = 30/100

With the Government now in caretaker mode and with Assistant Treasurer and Minister for Financial Services, Stephen Jones, having ended his Parliamentary career it is worth considering what the Albanese Government has delivered to financial services over the past three years.

To do so, Financial Newswire reviewed all of Jones’ announcement over his three years in office and examined what were the issues he sought to address and what, if anything, he achieved.

And what is clear is that Jones started off declaring good intentions, including reviewing the Australian Securities and Investments Commission (ASIC) funding model declaring that “the Albanese Government is committed to ensuring that ASIC, and the frameworks it uses, are sustainable, in step with the times, and appropriate for today’s financial sector”.

The outcome? The industry funding model remained largely unchanged.

Jones also announced consultation on financial adviser professional standards, noting that the Government had made an election commitment to remove tertiary education for financial advisers who had passed the exam, had 10 years’ experience and a clean record.

The outcome? Largely delivered.

When it came to one of the legacies of the former Coalition Government – the Your Future, Your Super performance test, Jones announced a consultation process to look at “any unintended consequences and implementation issues” noting that “the second annual performance test for MySuper products which revealed that 96 per cent of MySuper members are in a well-performing fund”.

The outcome? Some minor methodology tweaks.

Jones then moved to “advancing” the recommendations of the Hayne Royal Commission and said the Government had finalised legislation to implement “recommendations to extend the Banking Executive Accountability Regime to all APRA-regulated entities and to provide for joint administration between APRA and ASIC”

Perhaps more importantly, the same announcement said the Government would be “delivering on its election commitment to establish a Compensation Scheme of Last Resort (CSLR) to ensure Australians continue to have trust and confidence in the financial system external dispute resolution framework”.

The outcome? An industry funding model for the CSLR which is inappropriately focused on advisers and unsustainable.

In early 2023, Jones dealt with another legacy issue from the former Coalition Government, the release of the Quality of Advice Review chaired by Michelle Levy. A few months later he said the Government “will adopt the bulk of the QAR recommendations. He announced three streams of activity,  the first of which involved removing onerous red tape, the second of which promised to expand access to retirement income advice and the third of which was intended to “explore new channels for advice”.

The outcome? Two years’ later the Government managed to deliver only the first stream. The second stream of the now Delivering Better Financial Outcomes (DBFO) legislation is still yet to pass the Parliament and there is barely any discussion of the third stream.

Responding to concerns about the number of Managed Investment Schemes sitting at the heart of product failures, Jones in August 2023 released a consultation paper examining the regulatory framework for MISs and whether it remained fit for purpose.

Tied up in that review was the key question of whether the wholesale client thresholds remain appropriate.

The outcome? Little or no change, with MISs still not part of funding the CSLR regime.

In October, 2023, the Government announced the release of draft legislation which, in line with a Budget commitment, would reduce the tax concessionality of superannuation balances over $3 million. Not so prominently revealed in the minister’s statement was that the legislation also entailed taxing unrealised capital gains.

The outcome? The legislation became stuck in the Senate for the very reason that it entailed the taxation of unrealised capital gains – something which was rejected by the Federal Opposition and proved unpalatable to a significant cohort of the Senate cross-bench.

In November 2023, Jones was part of a Government announcement above legislating to enshrine the objective of superannuation which was regarded as many as the creation of a bulwark against future Governments repeating the Morrison Government’s Covid-19 early access scheme.

The outcome? Delivered.

In September 2024 the Government announced it would be moving to legislate for payday superannuation in a move designed to become effective from 1 July, next year.

The Government’s move reflected consistent pressure from the industry superannuation funds sector.

The outcome? Set to be delivered.

In January, this year, Jones also announced Government plans to introduce mandatory and enforceable services standards for all large superannuation funds regulated by the Australian Prudential Regulation Authority (APRA).

The Government’s announcement came in the wake of revelations that some large funds had fallen short on handling death benefit claims resulting in regulatory action and fines.

The outcome? Still in the development stage.

One of Jones’ last major announcements has been a Treasury Review of the Compensation Scheme of Last Resort (CSLR).

The outcome? The election intervened.

Jones’ last major announcement was the broad outline of the second tranche of the DBFO legislation.

The outcome? The election intervened