Division Description Changes — Bills — Financial Sector Reform (Hayne Royal Commission Response — Better Advice) Bill 2021; Second Reading — 21st Oct 2021

Change	Division
senate vote 2021-10-21#10 Edited by mackay staff on 2021-11-05 10:55:55	Title ~~Financial Sector Reform (Hayne Royal Commission Response — Better Advice) Bill 2021 - Second Reading~~ Financial Sector Reform (Hayne Royal Commission Response — Better Advice) Bill 2021 - Second Reading - Keep usual motion unchanged Description The majority voted against an amendment introduced by ACT Senator [Katy Gallagher](https://theyvoteforyou.org.au/people/senate/act/katy_gallagher) (Labor), which means it failed. The amendment would have added the text below to the usual second reading motion. A [second reading](https://peo.gov.au/understand-our-parliament/how-parliament-works/bills-and-laws/making-a-law-in-the-australian-parliament/) motion is "that the bill be read a second time," which is parliamentary jargon for agreeing with the main idea of [the bill](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6740). ### Amendment text > At the end of the motion, add ", but the Senate notes the Government has: > > (a) failed to effectively deliver professional standards reform in the financial advice sector; > > (b) been too slow to implement the findings of the Hayne Royal Commission; > > (c) established and then shut down the failed Financial Adviser Standards and Ethics Authority; > > (d) failed to adequately protect consumers; and > > (e) caused uncertainty and unnecessary costs for thousands of financial advisers across Australia". > (e) caused uncertainty and unnecessary costs for thousands of financial advisers across Australia".
senate vote 2021-10-21#10 Edited by mackay staff on 2021-11-05 10:55:38	Title Bills — Financial Sector Reform (Hayne Royal Commission Response — Better Advice) Bill 2021; Second Reading Financial Sector Reform (Hayne Royal Commission Response — Better Advice) Bill 2021 - Second Reading Description ~~<p class="speaker">Pauline Hanson</p>~~ <p>[by video link] I rise to speak on the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Bill 2021. The primary purpose of the Hayne royal commission was to look at the banks, but a considerable part of its focus ended up squarely on the financial advisory sector. With this legislation, the government seeks to place more responsibility and liability on financial advisory services, while, under the government's national consumer credit legislation schedule 1, the banks would have absolutely no responsibility if the government amendments were to proceed. Is it because the banks make large donations to the major political parties that they are being protected? I'm only thinking out loud.</p> The majority voted against an amendment introduced by ACT Senator [Katy Gallagher](https://theyvoteforyou.org.au/people/senate/act/katy_gallagher) (Labor), which means it failed. The amendment would have added the text below to the usual second reading motion. A [second reading](https://peo.gov.au/understand-our-parliament/how-parliament-works/bills-and-laws/making-a-law-in-the-australian-parliament/) motion is "that the bill be read a second time," which is parliamentary jargon for agreeing with the main idea of [the bill](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6740). ### Amendment text *> At the end of the motion, add ", but the Senate notes** the Government has:* > *> (a) failed to effectively deliver** professional standards reform in the financial advice sector;* > *> (b) been too slow to implement the findings of** the Hayne Royal Commission;* > > (c) established and then shut down the failed Financial Adviser Standards and Ethics Authority; > *> (d) failed to adequately** protect consumers; and* > > (e) caused uncertainty and unnecessary costs for thousands of financial advisers across Australia". <p>I have made it clear to both the government and the public at large that I would never support legislation that would absolve the banks of any responsibility for their actions. And yet here we have the government, under this bill, imposing strict liability clauses while waiving the normal standard of the presumption of innocence. While I agree with the scope of this bill, it should be amended to remove strict liability clauses so the presumption of innocence is maintained, as recommended by the Standing Committee on the Scrutiny of Bills in its inquiry. Furthermore, the strict liability imposes a reversal of the onus of proof for offences which are minor in comparison to what all Australians have witnessed with breaches of responsibility by Australians banks. Surely all senators must see the contradiction between these bills and the disparity of the liability on both sectors.</p> <p>Presumption of innocence is one of the essential foundations of a fair judiciary in a representative democracy. Strict liability would essentially place the onus of proof on the defendant, effectively presuming guilt. Despite the committee's recommendation, all of its members in this chamber are not acting to implement it. They're not acting on their own recommendations! It doesn't make sense. It isn't remotely logical. Such is the nature of politics in this place and the reason that public trust in the financial sector and government is abysmally low or non-existent.</p> <p>One Nation also called on the government for the insertion of a clause for requiring that the one-size-fits-all course for financial advisers and stockbrokers provided by the Financial Adviser Standards and Ethics Authority be varied to ensure they cater for these two very different disciplines. Therefore, I would now call on the government to ensure that ASIC, as the responsible authority, addresses this disparity in its regulations currently released for comment. There should be separate courses ensuring those who undertake them are suitably qualified for these different roles. It's just not fit for purpose when a stockbroker is being tested on providing advice about social services, as an example.</p> <p>In considering this legislation, I think it's important to highlight some of the findings of the royal commission. These findings confirmed what many Australians already knew: quite a few financial advisers were in it for themselves and certainly not in it for anyone else. As the old saying goes: 'If you can't be part of the solution, at least you can still make a lot of money by being part of the problem!' That's why the findings were not at all surprising to the many Australians sacrificed on the altar of profit.</p> <p>Firstly, the royal commission observed that, in almost every case it examined, the conduct in question was primarily driven by individuals' pursuit of gain. Sales became all important. Those who dealt with customers became sellers. And the confusion of roles extended well beyond frontline service staff: advisers became sellers, and sellers became advisers. Service to customers took second place.</p> ~~<p>Secondly, entities and individuals acted this way because they could. Consumers had little in the way of informed choice, and this created a very uneven playing field.</p>~~ <p>Thirdly, consumers often dealt with the financial services entity through the intermediary. They would, understandably, believe that that intermediary was acting in their interests, when all too often intermediaries were paid to act in the interest of the provider of the service or product. Legislation requires these conflicts of interests to be managed, but all too often they were resolved in favour of the provider. As the final report noted:</p> ~~<p class="italic">An intermediary who seeks to 'stand in more than one canoe' cannot.</p>~~ ~~<p>Finally, the royal commission observed that, too often, financial services entities that broke the law were not properly held to account. It stated:</p>~~ <p class="italic">Misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly punished. Misconduct … that yields profit, is not deterred by requiring those who are found to have done wrong to do no more than pay compensation. And wrongdoing is not denounced by issuing a media release.</p> ~~<p>I think the final report nailed it when it said:</p>~~ <p class="italic">The Australian community expects, and is entitled to expect, that if an entity breaks the law and causes damage to customers, it will compensate those affected customers. But the community also expects that financial services entities that break the law will be held to account. The community recognises, and the community expects its regulators to recognise, that these are two different steps: having a wrongdoer compensate those harmed is one thing; holding wrongdoers to account is another.</p> ~~<p>Senators will ignore this message only at great peril.</p>~~ <p>This legislation attempts to implement the government's response to recommendation 2.10 of the royal commission to establish a new disciplinary system for financial advisers and provide for a single central disciplinary body. The government says this will involve expanding the Financial Services and Credit Panel within the Australian Securities and Investments Commission to operate as the single body and ensure less serious misconduct doesn't go unaddressed; creating new penalties and sanctions; introducing a new registration system to improve transparency and accountability; and transferring functions from the Financial Advisers Standards and Ethics Authority to the minister and ASIC.</p> <p>With the amendments I have outlined, One Nation is prepared to support the legislation. Financial sector reform is absolutely critical to meet the community's expectations. This government must ensure accountability and transparency in the financial services sector; equally, it should do so in the banking sector. It's not only in the interests of everyday Australians but in the interests of the financial sector itself. I call on senators to seriously consider supporting my amendments to make this a better piece of legislation.</p> ~~<p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>~~

~~Pauline Hanson~~
[by video link] I rise to speak on the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Bill 2021. The primary purpose of the Hayne royal commission was to look at the banks, but a considerable part of its focus ended up squarely on the financial advisory sector. With this legislation, the government seeks to place more responsibility and liability on financial advisory services, while, under the government's national consumer credit legislation schedule 1, the banks would have absolutely no responsibility if the government amendments were to proceed. Is it because the banks make large donations to the major political parties that they are being protected? I'm only thinking out loud.
The majority voted against an amendment introduced by ACT Senator [Katy Gallagher](https://theyvoteforyou.org.au/people/senate/act/katy_gallagher) (Labor), which means it failed. The amendment would have added the text below to the usual second reading motion. A [second reading](https://peo.gov.au/understand-our-parliament/how-parliament-works/bills-and-laws/making-a-law-in-the-australian-parliament/) motion is "*that the bill be read a second time,*" which is parliamentary jargon for agreeing with the main idea of [the bill](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6740).
### Amendment text
> *At the end of the motion, add ", but the Senate notes the Government has:*
>
> *(a) failed to effectively deliver professional standards reform in the financial advice sector;*
>
> *(b) been too slow to implement the findings of the Hayne Royal Commission;*
>
> *(c) established and then shut down the failed Financial Adviser Standards and Ethics Authority;*
>
> *(d) failed to adequately protect consumers; and*
>
> *(e) caused uncertainty and unnecessary costs for thousands of financial advisers across Australia".*
I have made it clear to both the government and the public at large that I would never support legislation that would absolve the banks of any responsibility for their actions. And yet here we have the government, under this bill, imposing strict liability clauses while waiving the normal standard of the presumption of innocence. While I agree with the scope of this bill, it should be amended to remove strict liability clauses so the presumption of innocence is maintained, as recommended by the Standing Committee on the Scrutiny of Bills in its inquiry. Furthermore, the strict liability imposes a reversal of the onus of proof for offences which are minor in comparison to what all Australians have witnessed with breaches of responsibility by Australians banks. Surely all senators must see the contradiction between these bills and the disparity of the liability on both sectors.
Presumption of innocence is one of the essential foundations of a fair judiciary in a representative democracy. Strict liability would essentially place the onus of proof on the defendant, effectively presuming guilt. Despite the committee's recommendation, all of its members in this chamber are not acting to implement it. They're not acting on their own recommendations! It doesn't make sense. It isn't remotely logical. Such is the nature of politics in this place and the reason that public trust in the financial sector and government is abysmally low or non-existent.
One Nation also called on the government for the insertion of a clause for requiring that the one-size-fits-all course for financial advisers and stockbrokers provided by the Financial Adviser Standards and Ethics Authority be varied to ensure they cater for these two very different disciplines. Therefore, I would now call on the government to ensure that ASIC, as the responsible authority, addresses this disparity in its regulations currently released for comment. There should be separate courses ensuring those who undertake them are suitably qualified for these different roles. It's just not fit for purpose when a stockbroker is being tested on providing advice about social services, as an example.
In considering this legislation, I think it's important to highlight some of the findings of the royal commission. These findings confirmed what many Australians already knew: quite a few financial advisers were in it for themselves and certainly not in it for anyone else. As the old saying goes: 'If you can't be part of the solution, at least you can still make a lot of money by being part of the problem!' That's why the findings were not at all surprising to the many Australians sacrificed on the altar of profit.
Firstly, the royal commission observed that, in almost every case it examined, the conduct in question was primarily driven by individuals' pursuit of gain. Sales became all important. Those who dealt with customers became sellers. And the confusion of roles extended well beyond frontline service staff: advisers became sellers, and sellers became advisers. Service to customers took second place.
~~Secondly, entities and individuals acted this way because they could. Consumers had little in the way of informed choice, and this created a very uneven playing field.~~
Thirdly, consumers often dealt with the financial services entity through the intermediary. They would, understandably, believe that that intermediary was acting in their interests, when all too often intermediaries were paid to act in the interest of the provider of the service or product. Legislation requires these conflicts of interests to be managed, but all too often they were resolved in favour of the provider. As the final report noted:
~~An intermediary who seeks to 'stand in more than one canoe' cannot.~~
~~Finally, the royal commission observed that, too often, financial services entities that broke the law were not properly held to account. It stated:~~
Misconduct will be deterred only if entities believe that misconduct will be detected, denounced and justly punished. Misconduct … that yields profit, is not deterred by requiring those who are found to have done wrong to do no more than pay compensation. And wrongdoing is not denounced by issuing a media release.
~~I think the final report nailed it when it said:~~
The Australian community expects, and is entitled to expect, that if an entity breaks the law and causes damage to customers, it will compensate those affected customers. But the community also expects that financial services entities that break the law will be held to account. The community recognises, and the community expects its regulators to recognise, that these are two different steps: having a wrongdoer compensate those harmed is one thing; holding wrongdoers to account is another.
~~Senators will ignore this message only at great peril.~~
This legislation attempts to implement the government's response to recommendation 2.10 of the royal commission to establish a new disciplinary system for financial advisers and provide for a single central disciplinary body. The government says this will involve expanding the Financial Services and Credit Panel within the Australian Securities and Investments Commission to operate as the single body and ensure less serious misconduct doesn't go unaddressed; creating new penalties and sanctions; introducing a new registration system to improve transparency and accountability; and transferring functions from the Financial Advisers Standards and Ethics Authority to the minister and ASIC.
With the amendments I have outlined, One Nation is prepared to support the legislation. Financial sector reform is absolutely critical to meet the community's expectations. This government must ensure accountability and transparency in the financial services sector; equally, it should do so in the banking sector. It's not only in the interests of everyday Australians but in the interests of the financial sector itself. I call on senators to seriously consider supporting my amendments to make this a better piece of legislation.
~~Long debate text truncated.~~