The Federal Opposition has continued its attack on the Government for not properly assessing the impact of the Future of Financial Advice (FOFA) reforms.

Shadow Assistant Treasurer Mathias Cormann said in a Senate estimates hearing last week the Government’s regulatory impact statements did not have enough information about the impact of the legislation on business and consumers.

Problems with assessing FOFA’s impact were revealed by the Office of Best Practice Regulation Executive Director Jason McNamara at the Senate hearing.

He said his office reviewed six regulatory impact statements on FOFA provided by Treasury, but had not found them adequate or meeting best practice.

“In regard to those [impact statements], essentially the impact analysis wasn’t at a standard that we would pass,” Mr McNamara said.

“Essentially… Treasury were preparing [the statements]. We had exchanged drafts, so it was an ongoing process and it is true that time ran out in that sense.”

Senator Cormann told the hearing Treasury had said the impact statements were reviewed by Mr McNamara’s office in April last year and the legislation was introduced into Parliament in October.

“You didn’t make your non-compliance with best practice regulation finding until August 8, Senator Cormann said. “Why would you not have had enough time to review the statement that was prepared?”

Mr McNamara said once a decision has been made on the legislation, there will be no need for a regulatory impact statement, but one had been attached to the FOFA Bill’s explanatory memorandum.

He said the statement was adequate, but on further questioning by Senator Cormann added that six elements of the bill did not have an adequate impact statement.

These were the carve-out of simple products, treatment of soft-dollar benefits, access to advice, replacement of the accountant’s exemption, renewal requirements on ongoing financial advice fees to retail clients, and the treatment of paid commissions on insurance products within the superannuation and life insurance products outside of superannuation.

The lack of impact statements on these issues was confirmed by Finance Minister Penny Wong at the hearing.

Senator Cormann says the hearing evidence has confirmed the Financial Services Minister Bill Shorten pressed ahead with the FOFA legislation without proper regulatory assessments.

“Minister Shorten should not be allowed to press ahead with his vested interest agenda to make Australia the world leaders in financial advice red tape without going through proper process,” Senator Cormann said.

“The least people should be able to expect is that the Government will comply with its own process requirements before pressing ahead with changes the industry says will cost $700 million to implement upfront, and $350 million a year thereafter – costs which will ultimately be borne by consumers.”