On 11 May 2020, the Treasurer announced a six-month deferral to introducing legislation that implements commitments associated with the Financial Services Royal Commission. Instead, legislative focus will be given to managing the impacts of COVID-19 on businesses.
The Treasurer announced that measures that had been scheduled for implementation into Parliament by 30 June 2020 have been delayed to December 2020, and measures due to be introduced by December 2020 will now be introduced by 30 June 2021.
Remember the Financial Services Royal Commission? It may seem a long time ago given events of the last 20 months. But can you remember it? Day after day of even more shocking revelations of appalling treatment of consumers by Australia’s largest banks and financial services organisations. Charging dead people fees? Junk insurance sold to intellectually disabled people from a call centre ‘boiler room’. Financial services witnesses being stretchered out of court after collapsing in the witness box.
This is the legislation which embodied the 76 recommendations of Commissioner Hayne in response, committed by the Government to be implemented in full.
On any view, there is merit to Treasury’s logic that the implementation of the Royal Commission recommendations must be balanced against the challenges posed by the coronavirus, in particular upon certain parts of the financial services industry struggling to adapt to COVID-19 demands and financial stress.
But what we want to know is, who do these delayed reforms really assist? Who asked for them?
Cynically, as the first lockdown entered its early weeks, we waited to see which lobby group would be first in leaping upon the pandemic to seek to delay, and potentially in time weaken the reforms. Insurance was first out of the blocks.
Further, there’s a clear logic gap here. Why does the implementation of the legislation – as opposed to implementation of the laws after they have passed parliament – need to be delayed? Parliament could debate the proposals within the timetable first envisaged, pass the laws, and give a longer lead time for the industry to adapt. That would be a better outcome for all businesses in the short-term.
It suggests that the real problem is either getting the legislation before parliament in trying times, when there are conflicting priorities, or accommodating the big business lobby groups who want to delay these reforms as long as possible.
Whatever the case, delaying reforms, potentially opening them to being undermined or wound back, is not the outcome needed.