The Labor Party will take a reworked version of the Future of Financial Advice (FOFA) legislation to the next election considering the current amendments as gutting the legislation before it has had time to take effect.
Federal Shadow Treasurer Chris Bowen made the comments to media at the Association of Financial Advisers National Conference in Cairns earlier today stating the Labor Party was committed to the principles of FOFA and would continue to work against the amendments in the Federal Senate.
"The Government still has to bring the legislation to a vote before the House to oppose the repeal of FOFA. Based on Mr Palmer's comments the repeal will be successful but we will wait and see," Bowen said. "Anyone who predicts the result of Senate vote is a brave person and I am not going to do that. We will oppose the repeal."
He said the Opposition was continuing to consult with the financial advice sector because the Government had repealed FOFA "before it has even been allowed to do its job".
"In that environment where the FOFA laws have been repealed it is incumbent for us to consult on its replacement. The FOFA laws should have been allowed to continue and do their job and be effective."
When asked why he labelled the amendments before Federal Parliament as a repeal of FOFA Bowen said "it was a gutting of FOFA. Let's be clear. They can call it tweaking, call it amendments but it is the gutting of FOFA".
He said recent Australian Securities and Investments Commission (ASIC) report into life insurance was deeply concerning and underlined the need for FOFA.
He defended the carve out for life insurance commissions as necessary to deal with the low levels of insurance take up by consumers.
"Having said that this report is deeply concerning in itself and we are committed in the principles of FOFA," Bowen said.
"In the lead up to the next election will continue to consult specifically with the sector about the policy details which go around these principles and one of the things we will look at is this damning report from ASIC."
Bowen stated the recent Financial Services Council proposal for an Government run adviser standards board countered the Government policy in amending FOFA.
"It was interesting that the peak body of the industry said there was not enough regulation and underlines why Government is going the wrong way. It fundamentally undermined the policy of the Government."
