Mere days after the Financial Advice Association Australia (FAAA) urged the Senate economics references committee to call witnesses and set hearing dates, the Senate has instead delayed its reporting date four months from 27 March to 28 July.
“In the context of the blow out in the cost of the scheme and the overwhelming evidence of deep flaws in the design and implementation of the CSLR, this delay is very frustrating,” FAAA general manager policy, advocacy and standards Phil Anderson said on LinkedIn.
“The FAAA was instrumental in the calling of this inquiry last September and the reasons for an inquiry have grown exponentially since then.
“When faced with the news last week that not only will the scheme potentially cost the advice profession $70 million in 2025/26, but in fact much more in 2026/27, there is an absolute urgency for the government to take action.”
On 31 January last week, the Compensation Scheme of Last Resort (CSLR) released its initial levy estimate for the upcoming financial year, calculated along with independent external actuaries Finity, with the figure skyrocketing to a combined $77.9 million across all sectors.
The breakdown across industries is bad news for financial advisers, with the vast majority of $70.1 million being attributed to the subsector.
As Anderson noted, the actuarial report also indicated that the 2026-27 financial year could be considerably higher again, with early projections indication a figure as high as $125 million.
In a separate statement on 31 January, Minister for Financial Services Stephen Jones announced the Albanese government has directed the Treasury to undertake a comprehensive review of the CSLR.
“Deferring action on the grounds of a delay in the Senate inquiry or due to calling a new review is simply not an acceptable position to take,” Anderson added.
“The advice profession needs and demands greater certainty on their exposure under the CSLR and it is essential that the government and the Parliament listen to those calls and make commitments before the election.”
In its statement earlier this week, FAAA chief executive Sarah Abood said the levy and review announcement shouldn’t be “an excuse to delay the Senate inquiry in Dixon Advisory”.
“The case had been made for the critical importance of this inquiry, and stakeholders have provided multiple submissions. There is much that still needs to be investigated. Senators Bragg and Walsh should call witnesses for this inquiry immediately,” Abood said.
“We have continued to unearth problems not only at Dixon Advisory but also at other firms where a variety of problems have arisen.”
Given Minister Jones has announced his retirement and a federal election is on the horizon, the Abood flagged her concern that the inquiry could be lost in the shuffle.
“If anyone is in any doubt that there are problems with the way that the CSLR has been designed, and the potential implications emanating from not just Dixon Advisory but other firms, then they need only to read the submissions that have already been made,” Abood said.
“Much of the work to determine the problems with the CSLR has already been done, and it must not go to waste.”
