What can the Financial Services Sector Expect from the
New Federal Government?
"Son of Wallis" Inquiry
The incoming Coalition government has committed to conducting a
comprehensive "root and branch" inquiry into the banking
and financial services sector regulatory framework. That inquiry
will be completed within the first term of government with
implementation of any recommendations likely to be a second term
priority. A consultation draft of the terms of reference should be
available shortly if the Coalition meets its commitment to release
this within its first 100 days in office.
Until the review is completed, the Coalition has committed to a
moratorium on further significant regulation in the financial
Future of Financial Advice (FOFA) Amendments
The Coalition has committed to implementing all the
recommendations that it made in response to the 2012 Parliamentary
Joint Committee inquiry into FOFA. These recommended changes
complete removal of opt-in requirements
annual fee disclosure obligations on financial service
providers will be reduced
providing greater certainty in relation to the best interests
providing greater certainty around the provision and
availability of scaled advice
reversing the government's ban on risk insurance within
reform of conflicted remuneration rules.
Superannuation Fund Reforms
The Coalition has consistently said that it will introduce
reforms to the Fair Work Act so that default superannuation
provisions in awards are open to more competition amongst
In addition, the Coalition is keen to review the governance
arrangements for superannuation fund trustee boards and move away
from the equal representation model, adopted by many industry
funds, which sees half the board come from member/union
representatives and half from employer representatives. This review
will examine the efficacy of appointing independent directors to
The Coalition has also announced that it will defer for two
years (to 2021) the stepped increases in compulsory employer
contributions from nine to 12 per cent.
Easing Red Tape Burden on Small Business –
The Coalition will introduce a framework allowing small
businesses the option to remit compulsory superannuation payments
on behalf of employees directly to the ATO in an effort to ease the
compliance burden for small business. The clearing house is
currently managed by the Department of Human Services.
No Stated Positions on Further Privacy and Credit Reforms
The new government does not currently have a publicly stated
position in relation to:
mandatory data breach notification reforms that were close to
being enacted in the last sitting of Parliament, or
further reforms relating to consumer credit such as proposed
reforms to investment lending.
Reforms of the Previous Government
The Coalition has maintained a position that it will reverse
Labor's controversial changes to fringe benefit tax and is
likely to do so. However, Labor's planned Financial Stability
Fund that will be funded by a levy set at 0.05 per cent on deposits
of up to AUD250,000 remains intact and will commence on 1 January
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