The nation’s peak financial industry body has asked newly installed Treasurer Chris Bowen to delay key reforms to superannuation and financial advice laws for a year.
Financial Services Council (FSC) chief executive John Brogden called Mr Bowen on his first morning in the treasurer’s office to seek a delay to laws due to take effect on July 1, saying the finance industry was at “extraordinarily high risk” of non-compliance with the complex changes.
Mr Brogden wrote to newly appointed Prime Minister Kevin Rudd, Financial Services Minister Bill Shorten and Mr Bowen on Thursday morning to ask that the July 1 implementation of the Future of Financial Advice (FoFA) and Stronger Super reforms be put off for one year.
“I also spoke to Chris Bowen this morning,” Mr Brogden told reporters in Sydney.
“He said `give me time to get my feet under the desk’, which is fair enough, but we’re very keen that they understand the dilemma we’re in.
“Kevin Rudd made it very clear that he wants to work with business – we’re giving him an opportunity to show how he might be able to do that.”
The FSC says the industry has not been able to prepare for the changes as many regulations have not yet passed parliament.
“We are yet to see all the legislation and we are yet to see all the regulations,” Mr Brogden said.
The FOFA laws ban hidden commissions on financial advice and require financial advisers to act in the best interest of clients and clearly explain their fees.
The FSC has been critical of the cost the laws impose on the industry.
The Stronger Super legislation creates simple, low-cost superannuation options aimed at saving fees and charges for fund members.
Mr Brogden said the total cost of compliance was around $1.5 billion and there was “a level of indecent haste” in the July 1 deadline.
Mr Brogden said he was not asking for the legislation to be changed, only to be delayed.
He also said “the world’s longest election campaign” had been destabilising for the business community but companies now simply wanted to avoid a hung parliament after the next election.
“The real message from business to Australians is we want you to elect a majority government so they can have control of the agenda,” he said.
