Real work needed in wake of election
ANALYSIS
With the Federal Election outcome now clearly defined, attention will turn to which member of the Government will be appointed to become Assistant Treasurer and run the Financial Services portfolio.
Surprisingly, there will also be interest in who will take the portfolio on the new Federal Opposition front bench in circumstances where the shadow Assistant Treasurer and Minster for Financial Services, Luke Howarth appears to have lost his Brisbane seat of Petrie in the same political rout which saw the Federal Opposition leader, Peter Dutton lose his seat of Dickson. The Shadow Treasurer now emerges as a front-runner to replace Dutton as the Parliamentary leader of the Liberal Party leaving the Treasury portfolio an open bet.
The list of contenders to replace the politically retired Stephen Jones in the financial services portfolio is not long and includes the current Assistant Minister for Competition, Charities and Treasury, Assistant Minister for Employment, Andrew Leigh and someone not yet in outer cabinet, former adviser to Bill Shorten in the portfolio, Dr Daniel Mulino.
What seems certain is that the same measure of control over the portfolio that was exhibited by the Treasurer, Jim Chalmers, during the last Parliament will be evident in his relationship with the successor to Jones.
And that person will find at the top of their ministerial briefing in-box the festering issue of the funding arrangements for the Compensation Scheme of Last Resort (CSLR) and the less than warm welcome being offered to the exposure draft DBFO legislation.
The major financial services lobby groups will need to act quickly and loudly to be heard because, if history is any guide, then the new minister will try to dispense with tricky legacy issues as quickly and painlessly as possible to give them room to make their own mark.
Crucial to the financial services sector will be the make-up of the Senate in circumstances where the Government now controls a handsome majority in the House of Representatives – something which obviates the need to haggle with pesky cross benchers over controversial policy issues such as the legislation which remains on foot for the taxation of unrealised capital gains.
That legislation, tied up to reduce the tax concessionality of superannuation balances over $3 million faced defeat in the Senate in the last parliament but might be easier for the Government to navigate if the new Senate reflects the pro-Government outcomes evident in the House of Representatives.
Equally challenging for the financial advice sector will be extracting any significant change from the Government on its exposure draft of the DBFO legislation in circumstances where the Prime Minister, Anthony Albanese and the Treasurer, Jim Chalmers, will be conscious of the debt owed to trade unions and the industry funds.
There is, however, better hopes for the profession extracting meaningful change to the CSLR in circumstances where there is clear and growing evidence that the current funding formula is mired in mora hazard.
“Equally challenging for the financial advice sector will be extracting any significant change from the Government on its exposure draft of the DBFO legislation in circumstances where the Prime Minister, Anthony Albanese and the Treasurer, Jim Chalmers, will be conscious of the debt owed to trade unions and the industry funds.”
This sordid stench which colours and taints everything will now be turbocharged.
Financial advice legislation heavily influenced by vested interests motivated by member retention and FUM control.
The next three years will no doubt be incredibly difficult for professional financial advisers, with the playing field likely to be heavily tilted toward collectively charged, super trustee dispensed “advice”.
I don’t know of any other profession that is subjected to the argubaly massive conflicts interest between legislators and product providers like is seen here in Australia.
The professional associations will need to perform a miracle to stop the steamroller which is coming.
My thoughts exactly and I’m sure many marginal advisors either due to their age or their worn out will be running the numbers on exiting. Nothing is going to get better!
Strongly hoping that Tim Wilson gets up in Goldstein.
Let me guess, whoever takes on the portfolio will start off with another review to kick the can a few more years down the road
The only lesson we should be taking from this outcome is we should be paying ASIC, Treasury and Politicians to speak at the Fiji conference, and just put your heads down and motor along.
Trying to compete with the big political donations of Super Funds is never going to work….but taking a lead from their book we can learn that the odd paid junket to an ASIC official never hurts too.
What lessons can we take from Treasury, where they spend two years and come up with a cut SOA and paste in CAR, as the solution to increase access to advice…clearly they don’t want Australians getting advice from Advisers but Super Funds. What lessons can we take from making advisers complete Masters Degrees then they allow Backpackers to become “Qualified Advisers”.
Merely relying on politicians to do the right thing for Australians won’t work.(see above). We just can’t compete with Super Fund money and we certainly don’t have any political bargaining power because the number of Advisers at 15,000 has been strategically cut.