Speaking at the Stockbrokers Association of Australia annual conference, Mr Cormann said that in particular, the provisions around opt-in requirements were burdensome and were not part of the Ripoll Inquiry, which had received bipartisan support from the Coalition.
“Let me just say that the FOFA process was one of the most shocking, chaotic, dysfunctional, incompetent government policy developments that I have ever witnessed,” Mr Cormann said.
“The opt-in proposal means as a client, as a consumer, if somebody wants to access financial services, I am forced to resign contracts with my financial adviser every two years.
“Where did this proposal come from? Of the 420 submissions at the Ripoll Inquiry, there was one submission that recommended that change and it came from the Industry Super Network.”
Mr Cormann said that mining and financial services were the two most profitable sectors of the Australian economy but that while mining was exclusively export-focused, financial services is domestically focused.
It is important to strengthen the sector and reduce the complexity around its regulation if the financial services sector is to reach its full potential through global exportation, he said.
“One of the challenges [is] if we want to provide fund managing services out of Australia in relation to investors that are located overseas… and there is uncertainly and complexity around the taxation implications that flow with that, then people will not use Australian fund managers to provide these services,” Mr Cormann said.
“If we don’t clarify that there is not going to be a tax implication, we won’t get the opportunity to obtain the services.
“But if we do clarify… we put ourselves in a position where we can compete with that service and can continue to grow what is already one of the most significant sectors in our economy.”
