Treasury consultations – treacle-down strategy

Mike Taylor

Managing Editor/Publisher, Financial Newswire

23 February 2026

ANALYSIS

Financial services sector stakeholders might be justified in wondering whether the number of Treasury consultations generated by the collapse of the Shield and First Guardian funds are tantamount to the “interdepartmental committee” made famous by UK comedy series, Yes Minister.

Whenever fictional Government Department head, Sir Humphrey Appleby wanted to buy time he recommended the establishment of a interdepartmental committees with “broad terms of reference”.

Right now, financial services organisations have been responding to multiple Treasury consultations and, apparently, more are on the way.

When will the sector see a result of all these consultations? Who knows!

But what is known is that if Treasury chose to read the submissions already received and cut to the chase by implementing the recommendations of those seen by Financial Newswire, then Managed Investment Schemes (MIS) would be made to pull their weight in terms of funding the Compensation Scheme of Last (CSLR) or, via Professional Indemnity Insurance, at least relief pressure on the last resort regime.

That is the bottom line of multiple submissions to Treasury’s consultations around the future funding of the CSLR and the effectiveness of professional indemnity insurance.

The period for submissions to the CSLR – enhancing professional indemnity insurance consultation closed on 13 February and it is likely to be months, if at all, before the Government chooses to make those submissions public.

Submissions responding to Treasury’s consultation on Enhancing oversight and governance of managed investment schemes will close this week but organisations such as the Financial Advice Association of Australia (FAAA) and the Joint Accounting Groups have already made some of their feelings known.

But while the FAAA and the accounting groups have made clear their view that MIS businesses should be made to pull their weight in terms of compensatory mechanisms, the reality of the Treasury consultation paper is that it does not canvass funding issues beyond “setting more specific requirements’ with respect to the financial requirements for responsible entities.

Indeed, in announcing the MIS consultation earlier this month, the Assistant Treasurer and Minister for Financial Services, Daniel Mulino made clear that it was in large measure a response to the issues which gave rise to the collapse of the Shield and First Guardian funds rather than the question of expanding the funding base for the CSLR.

Mulino described the consultation as forming “the first tranche of the Government’s broader agenda to strengthen consumer protections in the superannuation and

“The Government will soon consult on additional proposals to tack inappropriate lead generation, creating a safer framework for superannuation switching and the strengthening superannuation trustee governance standards,” he said.

“There will also be consultation on ensuring the sustainability of the Compensation Scheme of Last Resort (CSLR).”.

“I encourage industry and individuals to take part in the consultation process as we work to ensure Australians can maintain confidence in the superannuation system,” the minister said.

As Sir Humphrey might have said: “I recommend that we set up an interdepartmental committee with fairly broad terms of reference so that… we’ll be in the position to… arrive at a decision based on long-term considerations rather than rush prematurely into precipitate and possibly ill-conceived action”.