The Government has released draft legislation for consultation in response to 22 recommendations, and ‘additional commitments’, from the Banking Royal Commission.
Treasurer Josh Frydenberg said the Government is “on track” to have almost 90% of the Royal Commission recommendations at least introduced to Parliament – not necessarily legislated – by mid-2020 and all adopted recommendations by the end of 2020. Though these figures include the ‘additional commitments’ the Government made (but weren’t recommended by the Royal Commission) and excludes recommendations the Government wants reviewed by 2022, and appear to exclude the “other measures” – a mix of recommendations and additional commitments, many of which have no date for implementation.
This is consistent with the Government’s previously published timetable for implementation, but at odds with recent statements by Jane Hume, Assistant Minister for Superannuation, Financial Services and Financial Technology. Last week Hume said, in a speech, that the Government would implement “all of the recommendations of Hayne – 90% legislated by mid-year, and all of them by the end of 2020”.
One of the recommendations of the Royal Commission was for changes to default super, so that members were ‘stapled’ to their accounts. While the Government has accepted this recommendation, it is one of the recommendations that has no timeframe for implementation.
The Treasurer has been using the phrase “taking action” on the recommendations of the Royal Commission, which allows for the recommendations that the Government didn’t adopt – such as on mortgage broker trailing commissions.
The draft legislation released relates to several of the superannuation-related recommendations:
- 3.1: Banning super fund trustees from have other roles or offices
- 3.2: Stopping super fund trustees from being able to deduct advice fees (excluding intra-fund advice) from MySuper accounts
- 3.3: Limiting when advice fees can be deducted from Choice accounts
- 3.8: Adjusting the roles of APRA and ASIC
- 6.4: Giving ASIC the power to enforce provisions of the SIS Act relating to consumer protection
The Government plans to have legislation for each of these recommendations before Parliament by 30 June 2020.
Consultation on the draft legislation is open until 28 February 2020.