Parliament could debate first Hayne recommendation
Breaking policy alert
Centre Alliance hits hurdles in bid to end grandfathered commissions
By James Waugh
Senator Rex Patrick, a member of Xenophon successor party Centre Alliance, will this afternoon attempt to introduce an amendment to a Treasury Bill to end grandfathered commissions by July 1, 2020, ahead of the government's planned cut-off date of January 2021.
Senator Patrick’s office is still negotiating with the Treasury ahead of introducing the amendment, telling Australian Banking Daily that rebates enforced under the amendment remained the most complicated element to unravel. If the amendment is introduced, it will likely to be the first Senate vote on key recommendations from Kenneth Hayne's banking royal commission final report.
Senator Patrick’s office said they were determined to pass the amendment to the Treasury Laws Amendment (2018 Measures No.2) Bill 2018 in the Senate this sitting week and any technical issues could be dealt with in the House of Representatives.
"The government has suggested some improvements and we're always open to improvements. But we want to see a result this week," Senator Patrick told Australian Banking Daily.
In addition to ending the practice of grandfathered commissions by 1 July 2020 the amendment would also enforce rebates for any grandfathered fees imposed on customers by financial advisers after that date.
The Centre Alliance has been pursuing the end of grandfathered commissions since October 2018, but the final report of the Hayne Royal Commission has given renewed urgency to the issue.
Senator Patrick's office said the reforms should have been priced in by the sector, especially given the controversy surrounding the practice since 2012.
He rejected Labor's calls to end grandfathered commissions immediately, saying, "we are sympathetic to a transitionary period, there will be a lot for businesses to implement”.
Senator Patrick said it was unlikely grandfathered commissions would be abolished before the Centre Alliance's proposed date.
"Even if Labor wins the election they won't be able to end grandfathered commissions immediately,” he said.
“It may well be a year from now for a new government to address this issue. It comes down to what their legislative priorities are. Our Bill will help [Labor] in that regard, they'll already be on a transition."
Senator Patrick wasn't critical of the government's overall response to Hayne but did think the Liberal Party had unnecessarily delayed the royal commission.
"I don't think the government has been too slow to respond on this and the other Hayne recommendations. It's a pretty big report, we know how difficult it is to balance. We can't dedicate all the Senate's time to dealing with banking. I'm not going to be critical of the delay in addressing the royal commission, it's a large report and changes will have to be worked through properly," Senator Patrick said.
"A couple of other [Hayne related] amendments will come into play this week introduced by the government. In principle, we will support government amendments, but I never say yes to something I haven't seen."