The federal government has announced a six-month deferral of the implementation of measures relating to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry as a result of the coronavirus pandemic.
Treasurer Josh Frydenberg said the measures that had been expected to be introduced into parliament by 30 June would now be deferred to December and measures scheduled for introduction by December would be deferred to 30 June 2021.
“The deferral will enable the financial services industry to focus their efforts on planning for the recovery and supporting their customers and their staff during this unprecedented time,” Frydenberg said.
The updated timetable would balance “the need to implement the recommendations of the royal commission with the need to ensure our financial institutions are in a position to devote their resources to responding to the significant challenges posed by the coronavirus”, he added.
“The changes will also provide certainty and clarity to all stakeholders about the government’s commitment to implementing the recommendations arising out of the royal commission.”
The Association of Superannuation Funds of Australia (ASFA) welcomed the deferral.
“Superannuation funds have dedicated their focus towards effectively delivering the vital services their members need at this difficult time. This sensible deferral by government will ensure funds can continue to focus on supporting the immediate needs of their members,” ASFA said.
“Maintaining the stability of the superannuation system over the course of the pandemic has been paramount, especially while administering over $9 billion in early release of super payments to more than 1 million Australians.”
The Financial Planning Association of Australia (FPA) also welcomed the deferral, but called on the government to consider reviewing the updated timeline in order to adjust to the financial uncertainty caused by the pandemic.
“We look forward to recommencing discussions with the government about how some of the reforms could be better amended to reduce overregulation and red tape. There is a direct relationship between the rising cost of regulation, time constraints on financial planners and the ability of Australians to access advice,” the FPA said.
“While we broadly agree with the draft legislation on the royal commission recommendations, we do have real concerns for both the profession and consumers who we are seeking to serve.”
Association of Financial Advisers (AFA) chief executive Philip Kewin said the deferral would provide short-term certainty and called on the government to “closely monitor the full impact of the crisis and continue to assess the right timing for moving forward with these reforms”.
“The AFA remains hopeful that this sensible deferral will allow time for more consultation and looks forward to working with the government to consider the proposals that have been put forward to improve the exposure draft legislation, in order to ensure that these important reforms are both achievable and practical,” Kewin added.
In March, the FPA said the hasty introduction of reforms stemming from the Hayne royal commission was likely to further raise the cost of financial advice and increase the compliance burden for advisers.
