QAR tranche 1 delivered to ticking of election clock
ANALYSIS
The reality for financial advisers is that, for now, the Government has implemented as much of the Quality of Advice Review (QAR) recommendations as it is likely to before the next Federal Election.
It no longer has the time nor, it seems, the legislative draftsmen available to deliver on further changes before the middle of 2025 when the next Federal Election will have been run and won or, quite possibly, lost.
There is also talk of the Prime Minister, Anthony Albanese conducting a modest Cabinet reshuffle later this year leaving open the possibility of a new financial services minister.
Indeed, it was a measure of the Government’s desire to get The Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024 through the Parliament before the winter break that it forestalled any arguments in the Senate around the contentious s99FA dealing with paying advice fees from superannuation accounts.
The Assistant Treasurer and Minister for Financial Services, Stephen Jones, acquiesced to axing s99FA because he realised that it was not only facing defeat in the Senate but because the Government has other priorities and could no longer afford the time to conduct the argument.
The reality for Jones and the Government is that, but for a handful of Melbourne-based superannuation fund executives and trustees, the financial services industry had coalesced around the need to axe or amend the section.
Further, when challenged during Senate Estimates on the rationale for keeping the section in the legislation the explanations provided by both Treasury and ASIC sounded lame when compared to those posed by Law Council of Australia backed by the Financial Advice Association of Australia, the Licensees Principals Group and the Financial Services Council.
Thus, in announcing the passage of the legislation, Jones somewhat lamely referred to the manner in which the Government had “welcomed the constructive engagement with stakeholders and responded to feedback received on the legislation”.
“The legislation clarifies that Australians can use their superannuation accounts to pay for personal financial advice about their superannuation from an independent financial adviser. Superannuation funds will continue to satisfy their current obligations that govern the usage of member funds.
“The amendments to the Bill facilitate the passage of the first tranche immediately, maintain consumer protections, and support access to financial advice for the five million Australians at or approaching retirement,” the minister said.
Hardly surprisingly, Jones was on Thursday last week celebrating the passage of the first tranche of the QAR legislation but while referencing a second tranche he studiously avoided making reference to when they might be delivered.
If delivered at all, they will be delivered via new Parliament.
Before the last election Jones promised “quick fixes to the hot mess”. All he has delivered is very slow fixes to a tiny proportion of the hot mess. Plus an expansion of that mess through increased ASIC and CSLR costs.
Professional financial advice will be less affordable and less accessible to Australian consumers than when Jones came to power. A massive fail from a grossly incompetent and conflicted minister. He has to go.
Stephen Jones, is the guy that rubber stamped the idea of a “Qualified Adviser”…a term still in the proposed legislation. Any Adviser with educational qualifications higher than 2 days at AwareSuper should be deeply concerned and disappointed.
So far Advice numbers continuing to decline, GST input credits removed off Advice fees, the requirement to register advisers, the CSLR mess, mandatory breach reporting obligations, Adviser levies up 147%, Advice fees were nearly extinct from Super under his term, the term Qualified Advisers, training requirements for Qualified Advisers to be AQF level zip…..he’s certainly fixing advice.
The one that you can also add here was the very first act – the attempt to water down super fund trustee spending disclosures of member funds.
Remember that one?
It was a massive smack down for Stephen Jones and the ALP who had needlessly wasted political capital to attempt to push through one of the more idiotic thought bubbles emanating from their out of touch bureaucracies.
Stephen Jones now looks like an absolute fool, as does Labor Senator Deborah O’Neil who chaired the committee recommending it should remain.