With the naming of the first Abbott Cabinet, the Australian Financial Services industry has, unusually, found itself dealing with ministers who actually have some experience in dealing with the sector.
The new Treasurer, Joe Hockey, was the man who as a junior minister in the first Howard Government oversaw the development and implementation of the Financial Services Reform legislation, while the Assistant Treasurer, Senator Arthur Sinodinos was a former long-serving and senior public servant in the Departments of Finance and Treasury before he became chief of staff to former Prime Minister, John Howard.
Allied to that, the Parliamentary Secretary to the Treasurer, Gold Coast MP Steve Ciobo, has worked in the financial services sector with the likes of PriceWaterhouseCoopers.
Perhaps sadly for the industry, the former Shadow Assistant Treasurer, Senator Mathias Cormann – who drove the Coalition’s approach to financial services throughout the term of the last Parliament – has been promoted to the inner Cabinet as the Minister for Finance. It was a deserved promotion.
The bottom line, however, is that the organisations representing the financial services industry will be dealing with three politicians who have a better than working knowledge of the sector but, more importantly, a Treasurer who well understands the relevant legislative history.
Hockey, as the Minister for Financial Services and Regulation from 1998 to 2001, understands the processes which led to the development of the Financial Services Reform legislation. Further, as the Shadow Treasurer throughout the development and implementation of the Future of Financial Advice (FOFA) legislation, he well knows not only its contents but how those contents were arrived at.
Perhaps more importantly for the financial services industry, Hockey is intimately acquainted with the findings of the Financial System Inquiry chaired by Stan Wallis in 1997 (the Wallis Inquiry) – something which has given him impetus in moving for an Abbott Coalition Government to pursue a “son of Wallis” review of the financial services industry.
Hockey as Treasurer will have set a number of priorities for change in the financial services portfolio, not least addressing some of the perceived imbalances in the former Government’s approach to the FOFA legislation.
However his longer-term focus is likely to be the broader financial systems review (son of Wallace).
The reality of such a review is that it will allow the Abbott Government to range much more widely across the industry than did the former Labor Government under its FOFA or Stronger Super approach. Further, and consistent with the upcoming Senate Committee review of the Australian Securities and Investments Commission, it will provide scope to review the role of the regulators.
While Treasurer Hockey is undoubtedly a known quantity to many in the financial services industry, so are they to him. On that basis, some may care to reflect upon their conduct over the past six years.