Red faces all round as Financial Services and Regulation Minister Joe Hockey again finds himself on the back foot over allegations that he has stacked two major industry dispute resolution services with Liberal Party appointees.

Consumer advocate Chris Connolly has been joined by the powerful Australian Consumers Association in calling for ASIC to suspend the operations of Insurance Enquiries and Complaints (IEC) and the Financial Industry Complaints Service. Mr Hockey has appointed four Liberal party members and his next-door neighbour to consumer representative positions in the two organisations.

Mr Connelly, of the Sydney-based Financial Services Consumer Policy Centre, said  Mr Hockey’s appointments have removed the organisations’ hard-won reputations for independence. Mr Hockey has, of course, stood behind the appointments, maintaining in radio interviews that his appointees are “the best people for the job”.

“I think the best thing you can do is make sure the people who represent the minister have a broad range of experience,” he told an ABC interviewer on Friday.

The consumer reps see it differently, maintaining the latest appointments to various well-paid “consumer” positions on the two dispute resolution organisations are unwelcome examples of political cronyism.

Last year’s appointment to a consumer position on IEC’s Claims Review Panel of Mr Hockey’s neighbour, prominent former broker Frank Hoffman, raised a few eyebrows. But no one could dispute Mr Hoffman’s technical credentials for the job. He was an outstanding influence in the industry, and his contribution was recognised two years ago when NIBA awarded him the Lex McKeown Trophy.

The consumer appointees are Stephen Duffield, a former adviser to Communications Minister Senator Richard Alston; Wendy Machin, a consumer affairs minister in the last NSW Liberal government; Former federal Liberal politician Bob Baldwin; and fomer Liberal Parramatta city councillor Tony Issa.

The CEOs of the schemes – IEC’s Sam Parrino and Alison Maynard of FICS – declined to comment on the perceived political nature of the appointments. But it’s obvious they are uncomfortable with the way the appointments and the resulting publicity could compromise the two schemes’ independent image. The consumer representatives are a vital component in the schemes, balancing a similar number of industry representatives.

ASIC, which oversees the two schemes, has promised to investigate. It’s unlikely to be comfortable with the appointments, although ASIC will find it very difficult to do much about decisions made by its own minister. The appointments are within Mr Hockey’s charter, but previous ministers have been careful to appoint people who are consumer-oriented and non-political.