Stephen Jones (left) and Blake Briggs

The government wants to move onto the second tranche of Quality of Advice Review reforms and has no intention of rectifying issues raised by the advice sector over the first tranche.

In a post-budget media briefing, Financial Services Council CEO Blake Briggs told Minister for Financial Services Stephen Jones that the drafting of the bill “creates unacceptable legal risk for trustees”, and asked whether he was open to changing the provision as currently tabled before Parliament.

“We’d appreciate you looking at potentially amending those provisions to give regulatory certainty for the industry,” Briggs said.

Jones said he was aiming clarify the law to “affirm the status quo”.

“It was put into question as a result Michelle Levy’s review, and she put a spotlight on what she thought was a deficiency in the law to support status quo practice,” Jones said.

“What we are attempting to do is affirm status quo practice, not to change it but to affirm status quo practice.”

The DBFO bill sought to codify guidance from ASIC and APRA, but the advice sector has been critical of the provision, while super funds have been supportive, although the latter has still asked for more clarity over what their specific obligation will be.

“We think we’ve got it right,” Jones said.

“I’ve seen your advice, we’ve engaged with you and we’ll keep the door of conversation open. We think we’ve got it right, but we need to draw the regulator into this conversation as well. They’re independent of us of course but we need to bring them into the conversation as well and nail it.”

While the minister said the new law would codify existing obligations laid out by the regulators, Briggs pushed him on the disconnect between what the regulators have asked for previously and their recent comments.

ASIC and APRA have told funds to take a risk-based approach, but ASIC instead blasted them in a report last week for not checking advice files enough.

“There’s an extraordinary tension between them saying ‘trust us you only need to do a risk-based assessment’ but we’re going to use really inflammatory language to criticise the industry for their current practice, which is risk-based assessment,” Briggs said.

“I find it hard to see you can have it both ways at the same time – that we’re going to give a crack on one hand but then tell them the current approach is acceptable on the other.”

Jones said he wanted to avoid a “public exchange of barbs” on the issue.

“We’ve had an extraordinarily co-operative dialogue over all of the advice pieces, and I want that to continue and I don’t want it to be distracted where there is zero disagreement on policy,” Jones said.

Moving on

Jones said he wants to move on to the next parts of the reforms, noting the limited amount of Parliamentary sitting weeks between now and next may.

“I want to get this done, all of the pieces,” Jones said of the QAR reforms.

“The big work that will make a significant difference is the next tranche of work. I want to focus love and attention on that. I saw [advice fee deductions] as non-contro [sic].”

Asked whether something that hasn’t been announced or designed would be likely to have a shot at entering Parliament, Jones noted the limited capacity left for legislation to get through.

“Let me put it this way, if something’s not in the queue, very difficult to see it getting in the queue,” Jones said.

“Right across the Commonwealth of Australia there’s a shortage of drafting resources. I’m told that’s its actually international, not just here in Australia, there’s a shortage of expert drafting resources.

“It’s a knife fight every day trying to ensure your legislation or your proposed policy changes are in the queue. Even stuff in Parliament, we’ve seen an uncooperative Senate make it difficult to get stuff [passed] that we think everyone agrees on.”

Super wins

In the budget, the government announced $1.1 billion (over four years from FY25) for super to be paid on the Commonwealth Parental Leave Pay Scheme from 1 July 2025, for babies born on or after that date, which Jones claimed as a huge victory.

“We’ve won, how about that? Australians have won,” Jones said.

“The price tag on this is a tick over a billion dollars. I see it as correcting an anomaly. It is a meaningful contribution to women, but not exclusive to women, [and] their superannuation balances.”

For the future super policy agenda, Jones said there is no current push for a 15 per cent Superannuation Guarantee but the government is “committed” to locking it in at 12 per cent.

“Anyone who’s a political insider knows it’s part of our party platform [15 per cent SG] and it’s an aspirational piece,” Jones said.

Jones said the next item on the superannuation legislative agenda is pay-day super.

“It sounds simple… but there is an enormous system change effort of behalf of the government, platform providers and businesses, particularly small businesses,” Jones said.

“That’s our agenda, that’s what we’re putting our effort into the near future.”

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