Anne Stanley MP

21/03/2023

I rise to speak on the Financial Accountability Regime Bill 2023 and accompanying bills. Australia has an incredibly robust and well-developed financial sector that has grown considerably since the 1990s. The combined total assets managed by financial intermediaries is now around 150,000 for unpaid AFCA determinations in their favour for financial services or products that include personal advice on relevant financial products to retail clients, credit intermediation, securities dealing and credit provision.

This is an important measure that was recommended because of the inadequacies of other redress schemes. It's only fair that Australian consumers are compensated in the event of large financial failures. However, measures have been added to ensure that firms do not rely only on the CSLR, because it is, as the name implies, to be used only as a last resort. The government should not be responsible for a financial firm's failings, and if the CSLR provides compensation then ASIC must cancel the AFCA member's Australian financial services licence and/or Australian credit licence.

The funding aspect of the CSLR is another crucial element of these bills. The Commonwealth, on passage of these bills, will fund the operational costs from 23 December until 30 June 2024. But, importantly, the costs from 1 July 2024 will be fully funded by an industry levy, and the backlog claims will be funded through a one-off levy on the 10 largest banking and insurance companies in Australia. Taxpayers won't be paying for it. The CSLR must be financially stable and sustainable while also ensuring that the sector can account for the levies, which is why there will be a subsector cap of 250 million. However, this legislation accounts for those situations where a large financial institution fails and there are larger than expected expenses, with the minister having the power to issue special levies. The failing of a large financial institution would be detrimental, and we hope it doesn't happen, but the last few years and the 2008 financial crisis have shown us we should be prepared for all eventualities.

For the CSLR to be operational and compensating consumers from December, these bills should be passed this month. With their passing, the Albanese government will finalise the federal government's response to the Hayne royal commission. Australians deserves a financial sector that is ethical, and the Australian government will ensure that it is. The Australian people and our financial sector will be much better off for it.

Link to Hansard: Full Speech