Media Release - Royal Commission exposes Cormann's rank hypocrisy

This week we have seen yet again the real world impact of the Finance Minister’s obsession with deregulation and free market ideology.

The Banking Royal Commission has highlighted both the hypocrisy of Mathias Cormann and his Liberal and National Party colleagues along with what can happen when banks and financial institutions are prioritised over people.

For the likes of Cormann to express their outrage at the behaviour uncovered during the Royal Commission is galling.

During his time in Parliament, Cormann has consistently supported the banks and financial planning industry above the interests of every day Australians.

The fact is that the Finance Minister and the Turnbull Government are more concerned with so called “red tape” and the bank’s cost of doing business, despite these corporations already generating super profits.

In his maiden speech, Cormann emphasised the ideological importance of “checks and balances on government power” – no mention at all of the checks and balances on the power of banks and financial corporations.

This hands off approach to effective regulation ignored the damaging costs to the community. It’s only taken a Royal Commission to get their attention.

In 2012 Cormann and his Liberal colleagues strongly argued against the introduction of the Future of Financial advice Reforms. In a dissenting report to the Joint Committee on Corporations and Financial Services inquiry into the FOFA legislation Cormann and his Liberal colleagues said the legislation would:

“…increase red tape and costs for both business and consumers for no additional consumer protection benefit.” – (Dissenting Report by Coalition Members on the Corporations Amendment (Future of Financial Advice) Bill 2011)

In 2014, Cormann and the Abbott Government tried to gut the core of FOFA reforms. We still have no idea why any Government would want to water down financial protection laws.

In introducing this watering down of consumer protections for financial advice Cormann said:

"Labor's changes in government went too far and imposed too many additional costs without a proportionate consumer protection benefit."

These laws had been previously introduced to help prevent the very same scandalous behaviour - driven by a lack of regulation and enforcement - that we are seeing today.

At the heart of FOFA was the best interest test for clients, a legal obligation for financial advisers to do the right thing for the customer. It’s hard to believe, but prior to FOFA becoming law there was no legal obligation for financial advisers to act in the best interests of their customers - and many didn’t.

Millions of Australians have been let down by the free market ideology of Mathias Cormann and the Turnbull government - none more so than the victims of financial scandals.

These hard working Australians deserve an apology for the Coalition’s warped priorities and disgraceful efforts to deny them a fair hearing and justice.


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