Tony Abbott's latest budget pork pie

Tens of thousands of wealthier retirees will lose access to the age pension under changes targeting what Prime Minister Tony Abbott has described as "liquid assets millionaires".

Excuse me?

Every single one of these people receiving a part aged pension will continue to do so – it will just not be in the form of cash into their bank accounts.

Under Abbott’s sleight-of-hand the announced changes will lose them the small fortnightly cash transfers some currently receive, but they will all retain the highly financially lucrative seniors health card – a benefit worth thousands of dollars a year to the average retiree.

If you want proof of this just look at the paltry savings the Abbott Government is supposedly garnering from the this measure – a total of est. $177.7 million each year over the next four years.

An estimated 91,000 of those independent retirees (some of them millionaires) who structured their post-retirement assets, tax-free superannuation lump sums and income streams to allow themselves a regular federal government welfare payment and/or benefit, will lose their Centrelink cash transfer, but retain the right to bulk-billed medical services, heavily subsidised pharmaceuticals, subsidised public transport travel, telephone account concessions and, energy supplements etc via retention of the seniors health card.

Prime Minister Tony Abbott, Treasurer Joe Hockey, Finance Minister Mathias Cormann and the rest of their far-fight rabble must think Australian voters are fools if they expect them to swallow this politically convenient stop-gap measure aimed at neatly sidestepping the need for superannuation tax status reform.

An estimated 650,000 Australians are diddled by their boss. Time to ask your employers for proof that they are contributing to a super fund in your name?

The Sydney Morning Herald 27 April 2015:

By law, employers have to contribute 9.5 per cent of an employee's salary into their super fund.

However, a report in October by Tria Investment Partners found employer non-compliance amounted to $1.3 billion a year. Those affected by companies that did not allocate a super contribution were, on average, $3750 a year out of pocket, the report found.

In total, $2.5 billion is lost each year, including through the cash economy, sham contracting and businesses that go bust owing employees.

It estimates that 650,000 Australians are diddled by their boss. The worst industries for non-compliance are property services, mining, hospitality and manufacturing.

The report found that a 25-year-old whose super contributions were not paid for five years would lose 14 per cent of their total retirement fund because of compounding factors…..

About $200 million a year is lost by workers at businesses that go into insolvency.

However, Tax Office officials conceded last year that it was often "uneconomical" to chase small, individual amounts.

Association of Superannuation Funds of Australia chief executive Pauline Vamos said that was "disturbing" because the money owed was mainly to low-income earners.

Australian Taxation Office (ATO) page retrieved 27 April 2015:

Compulsory employer contributions

If you’re eligible for compulsory super guarantee contributions, your employer must pay them into a complying super fund.

Eligibility

Generally, you’re entitled to super guarantee contributions from an employer if you’re 18 years old or over and paid $450 or more (before tax) in a month. It doesn’t matter whether you’re full time, part time or casual, and it doesn’t matter if you’re a temporary resident of Australia.

If you’re under 18 you must meet these conditions and work more than 30 hours per week to be entitled to super contributions. If you’re a contractor paid wholly or principally for your labour, you’re considered an employee for super purposes and entitled to super guarantee contributions under the same rules as employees.

How much your employer should pay

If you’re eligible for super guarantee contributions, at least every three months your employer must pay into your super account a minimum of 9.50% of your ordinary time earnings, up to the ‘maximum contribution base’. (Note: prior to 1 July 2013 the rate was 9% and during the 2013-14 financial years the rate was 9.25%)

Checking that your employer is paying the correct super

If you think your employer isn’t paying your super into the right fund, or isn’t paying as much as they’re supposed to, you should ask your employer about it and check how much your super fund has received. If you still think there’s a problem you can lodge an enquiry with us.

Providing your tax file number

You need to provide your tax file number (TFN) to your employer and/or super fund on a Tax file number declaration form. If you don’t, your super fund may take extra tax out of your super contributions.

Choosing a super fund

Most people can choose the super fund they want their employer contributions paid into. If you’re eligible to choose a fund, your employer must give you a Standard choice form so you can make that choice in writing.

Working overseas

If you take up an Australian employer’s offer to temporarily work for them overseas, your employer must continue to pay super contributions for you in Australia. Your employer may be able to apply to the ATO for a Certificate of coverage so neither you nor your employer will have to pay super (or a super equivalent) in the other country.

Their master's voice has spoken. Where to now for tax reform under Abbott & Co?

On 30 March 2015 the Australian Treasurer Joe Hockey released a tax reform discussion paper titled Re:think, which is supposed to mark the start of a conversation about how we bring a tax system built before the 1950s into the new century.

Presumably this is to be a step towards the 'lower, simpler, fairer' revenue raising system Prime Minister Tony Abbott was banging on about during the 2013 election campaign.

The problem for the Abbott Government is that the propaganda power behind Abbott's 'throne', the ubiquitous far-right think tank pressure group the Institute of Public Affairs (IPA), is increasingly disenchanted with the federal government's approach to both taxation and superannuation.

So where to now for tax reform in the face of the slump in iron ore prices and company tax receipts that the prime minister and treasurer complain about.

Well, we know that Abbott has ruled out changes to company tax, intends to leave the superannuation loopholes in place for the rorting rich and will go ahead with tax cuts for small business in the face of that projected falling government revenue.

Capital gains tax breaks and negative gearing on investment properties also appear to be exempt from review.

Hockey is now promising no new taxes at all when he talks to the media, despite recently announcing the proposed 'Google' and 'Netflix' taxes.

He is also signalling no significant alteration of dividend imputation or any indexing of income tax thresholds to tackle bracket creep.

This is a mixed bag for the very rich and comfortably well-off.

They will not like the federal government abandoning its promises to cut the company tax rate and reduce 'bracket creep'.

However,  Abbott & Co are obviously not going to take tax perks away from those same very rich and comfortably well-off Australian citizens and would have a weather eye out for the irritable mood of its right-wing backers.

 So that leaves it with limited options for cost savings in the 2015-16 Budget.

All of which indicates more bad news may be coming for vulnerable sections of society, because those sections are where Abbott in particular likes to hunt.

BACKGROUND

IPA in The Drum, excerpt, 7 April 2014:

This Small Business Fetish Has Gone Too Far

As part of its back to basics campaign, the Abbott Government has telegraphed a small business tax package for the 2015 budget.

The plan, as far as we know, is that small business will get a tax cut of about 1.5 per cent. Big business will be left paying the standard rate of 30 per cent.

The Coalition has long had a romantic attachment to small business as a sort of moral heart of Australian private enterprise, but this policy is the worst sort of small business fetishism.

It threatens to further undermine an already complicated corporate tax system, confuses the sources of economic growth, and will distract policymakers from the much more fundamental task of opening protected areas of the economy up to competition.

Let's take these one at a time.

It beggars belief that while the political class is banging on about the convoluted the tax code, "unfair" tax concessions, and clever corporate tax minimisation, the Government is planning to increase the complexity of the corporate tax system.

How long before we see the first exposé in Fairfax business pages about large corporates rearranging themselves to take advantage of the concessional small business rates?

The proposed small business tax cut would make the Australian corporate tax system explicitly progressive. Just as we pay a higher rate of income tax according to our wealth, firms would pay a higher rate of corporate tax depending on their size. The United States has a progressive corporate tax. Ours is flat - 30 per cent no matter what.

Now, in practice, firms don't pay the same 30 per cent rate. As my Institute of Public Affairs colleague Sinclair Davidson has documented, all those deductions, offsets and credits mean the effective tax rate - that is, the amount of tax paid - hovers about 25 per cent. On top of this, small businesses tend to have much more variable profitability, so they tend to pay less than big business already.

Even with this caveat in mind, progressive corporate taxes are a terrible idea.

IPA in the Australian Financial Review, excerpt, 13 April 2015:

Moral Panic Overlooks Real Company Tax Problem

The corporate tax profit shifting debate is a classic example of moral panic. First, it's incredibly complicated. How many Australians could explain how company tax is calculated, let alone what business practices a "double Irish Dutch sandwich" refers to?

Second, it's driven by hyperbolic and simplistic reports of companies paying little to no tax. These stories pivot on even more complicated scandals, such as "Lux Leaks", and the technicalities of foreign tax systems.

And third, it's wildly overstated. The best current estimates of how much corporate tax is shifted across borders is in the realm of 2 per cent to 4 per cent of total corporate tax.

It's true that earlier estimates in the 1990s were much more than that. It was those high estimates that got the Organisation for Economic Co-operation and Development interested in the issue. But the firm- and affiliate-level evidence is better now. It's pointless to scrutinise a moral panic for the clarity of its claims. But the corporate tax debate is missing the point.

As a society we don't value firms for the money the government extracts from them. We value firms because they produce goods and offer services that make us richer, our lives easier, more convenient and more enjoyable, and our standards of living higher.

We ought to design our tax system to encourage foreign firms operating and doing business on Australian shores, bringing investment and jobs. Any attempt to tackle profit shifting that raises uncertainty or lowers Australia's investment climate would be a disaster.

The corporate tax is not a good tax. As a recent Treasury paper pointed out, it is one of the most inefficient taxes levied by Australian governments. The burden of the corporate tax is scattered and obscure.

IPA, media release, April 2015:

'Google Tax' will damage Australia's investment reputation

"The government's proposed 'Google tax' is nothing more than a tax grab and will damage Australia's investment reputation," says Chris Berg, Senior Fellow with the Institute of Public Affairs.

Treasurer Joe Hockey announced yesterday that the government has drafted legislation to go after companies accused of "profit shifting" across international borders to reduce their taxes.

"Companies should pay tax for economic activity in the countries in which that activity occurs. However to follow the United Kingdom's lead and introduce a Diverted Profits Tax would be to damage the integrity of our corporate tax system for little revenue benefit," says Mr Berg.

Mr Berg and Professor Sinclair Davidson put a submission into the Senate Inquiry into Corporate Tax Avoidance in February 2015.

"Institute of Public Affairs research has found that the profit shifting problem has been vastly overstated," says Mr Berg.

"There is little evidence to suggest the existing system is broken. Large firms are responsible for the vast bulk of Australia's corporate tax revenue. And past inaccurate Treasury forecasts of future corporate tax revenue are due to changing commodity prices, not corporate tax avoidance."

"Joe Hockey has a spending problem, not a revenue problem. If the government wants to get the budget back into shape it needs to focus on the size of government, not penalise successful companies for investing in Australia," says Mr Berg.

Mr Berg and Professor Davidson's submission is available at http://ipa.org.au/portal/uploads/2-feb-15-Submission_to_the_Senate_Inquiry_into_Corporate_Avoidance.pdf

IPA, excerpt from media release, 30 March 2015:

Tax reform must deliver tax cuts: IPA

The government's Tax Discussion Paper released today fails to address the need to reduce the size of government in Australia, says the free market think tank the Institute of Public Affairs.

"Australia does not need new or higher taxes. The Abbott government should immediately rule out the idea of a bank deposits tax, and reverse its previous tax increases," says Dr Mikayla Novak, Senior Research Fellow at the Institute of Public Affairs.

"The Tax Discussion Paper rests upon the false assumption that Australia is a low taxing country."

"But superannuation contributions, health insurance premiums, and workers' compensation premiums effectively act as taxes, since non payment of these obligations carry tax penalties," says Dr Novak.

IPA research shows that if these payments are added to the OECD tax statistics, the Australian tax to GDP ratio increases from 27.3 per cent to 34.3 per cent in 2012, above the OECD average of 33.7 per cent.

"There's no doubt that Australia would benefit from tax reform. Urgent problems that need fixing include the threat of bracket creep which is exacerbated by a steeply progressive income tax system. The compliance costs borne by tax complexity also needs to be substantially reduced," says Dr Novak.

"Australia needs to radically reduce and simplify the overall burden of its taxation regime, to unleash entrepreneurship, innovation, and investment for growth and prosperity."

"The best way forward is to very substantially reduce government spending, helping to provide room for tax cuts right across the board," says Dr Novak.

Institute of Public Affairs in The Canberra Times, excerpt, 6 March 2015:

Tinkering with the tax treatment of superannuation when people are forced to invest in a compulsory super regime bodes ill

Since the Keating government, the Commonwealth has forced people to forgo higher salaries for the sake of contributing to super funds that cannot be accessed until later in life.

Given the inconveniences of this financial policy paternalism, not to mention endless superannuation policy tinkering, tax biases against long-run savings patterns, and the existence of welfare programs, there are disincentives for individuals to save even more for retirement, which would seem to justify at least some sort of concessional treatment for super.

The rates of tax applicable to super contributions and earnings serve as a role model for the lower, flatter general income tax regime that Australia should aspire to, but, in the final analysis, the concessions would not garner such political discord if we abandoned compulsory superannuation altogether.

To do so would likely increase take‑home pay for workers, ease financial repression experienced by lower income earners, reduce skewness in asset holdings such as housing, help deflate a boated financial sector, and treat Australians as adults who can confidently come to their own trade-offs between consumption and savings.

Ending compulsory superannuation would be a much more durable reform than a shameless revenue grab aimed at tax‑captive superannuants.

IPA, January 2015:

No to the GST attack

Following recent direct and indirect tax increases, there has been speculation that the Abbott government is considering extending the GST to low value imports of $1,000 or less.

Putting a GST on low value imports is unlikely to revive Australian retailing in the face of intense online shopping competition, given the significant price differentials for many popular consumer products.

There are several important drivers of high retail costs in Australia, including a highly regulated labour market, severe land use restrictions, and trading hour conditions, which are not being addressed by governments.

Available estimates suggest that the administrative costs of ending the GST exemption threshold would greatly exceed actual revenues collected, violating a basic principle of tax policy if implemented.

If the GST low value import exemption is abolished, there can be no assurances that governments will spend the additional revenue in ways that give good value to taxpayers.

The Abbott government should rule out the anti consumer and anti taxpayer proposal to extend the GST to low value imports.

IPA, excerpt from media release, December 2014:

Government should reject call for higher taxes on Australians: IPA

The Abbott government should publicly reject the OECD's recommendation to slug Australians with higher taxes, according to free market think tank the Institute of Public Affairs.

"The latest OECD economic survey of Australia explicitly calls for Australians to bear an even heavier tax load," says IPA Senior Research Fellow Dr Mikayla Novak.

"This call for higher taxes to bring Australia more in line with the OECD average is misleading. IPA analysis has clearly demonstrated that Australia is not a low taxing country."

"The IPA has shown our 2012 tax-to-GDP ratio of 33.5 per cent (including superannuation and health insurance contributions) is now virtually level with the OECD average of 33.7 per cent."

"The tax recommendations, such as raising the GST to 15 per cent, higher land taxes, road user charges, and withholding future income tax cuts through a stabilisation fund, are an invitation for economic disaster if implemented."

"OECD calls for higher Australian taxes are precisely the wrong policy prescription for our budget overspending problems, and must be rejected by government in favour of more vigorous expenditure savings."

"If the government is to change Australian taxes, they should make our overall tax burden lower," says Dr Novak.

Time to keep track of what the boss and the banks want to do with your super

Medianet Release 2 March 2015:

BANKS OFFER INCENTIVES TO EMPLOYERS TO GAIN ACCESS TO EMPLOYEE SUPER

New research indicates that banks appear to be offering business bundling deals to employers, which could result in employees being switched into superannuation funds irrespective of the impact on their net returns and long term retirement savings.

A survey of 550 small and medium businesses conducted by UMR has produced some deeply concerning findings:

* 26% of employers surveyed said that a major bank had approached them about transferring their employees’ default superannuation to the bank’s own retail super fund in the last year.

* Just under half those approached say their bank offered them benefits to change funds.

* The most common offers made by the banks involved a direct benefit to the business rather than employees, such as discounts on business banking and insurance products. Some employers report being offered tickets to sporting events.

* 33% of employers offered benefits say they were persuaded to switch to a super fund promoted by their bank, and many more (57%) report that they are still considering switching.

* Two banks in particular appear to be the most active in approaching employers about switching default super fund arrangements and recommending their own fund.

“UMR’s employer survey gives rise to serious questions about the banks’ behaviour. It appears they are approaching employers and offering deals to bundle business banking services with employee default superannuation,” said David Whiteley, Chief Executive of Industry Super Australia.

"This could result in employees’ super contributions being paid into bank-owned super funds, which have on average historically produced lower net returns to their members.”

Were this the case, employees could retire with lower savings or feel compelled to commit more of their wages to super, or work longer, perhaps past 70, before they achieve a sufficient level of retirement income.

“In the best interests’ of employees, the law should be changed to prohibit a bank-owned super fund from providing default super services where it is also the provider of business banking services to the employer,“ said Mr. Whiteley.

“The research also reinforces the need for Australia’s super system to provide employers with a strong safety net of high performing funds to choose from, which have been assessed for quality by the Fair Work Commission. For the vast majority of Australians who leave it to their employer choose a fund for them, this process promotes consumer confidence in the system which safeguards Australia's retirement savings.

“However, the banks are lobbying the government to scrap the safety net. This would suit their vertically integrated business model and reduce competition by creating barriers to entry for super funds not owned by the banks,” he said. 

“It would also remove consumer protection for around eight million Australians who don’t choose their own super fund. Last year the banks unsuccessfully tried to remove consumer protections for Australians needing financial advice, now they are attempting to do the same with superannuation.

“Encouragingly, the research also found that most employers want to do the right thing by their employees,” said Mr. Whiteley.

“Fees and returns rank first and second as their most important considerations when selecting a default superannuation fund for their workers.”

Get the full report here.

Working women, rural & regional Australians hardest hit by Abbott Government plan to stop Low Income Super Contribution

Industry Super Australia Media Release 14 June 2014:

Working Mums, rural and regional Australians the hardest to be hit by Government plans to drop the Low Income Super Contribution (LISC)

Industry Super Australia (ISA) has today released a new analysis that illustrates the enormous impact of scrapping the Low Income Super Contribution (LISC) across Australia.

The LISC rebates up to $500 into the super accounts of all Australians earning less than $37,000 whose marginal rate of tax is 15% or less.

It was previously known that 3.6 million Australians stand to lose up to $500 a year from the proposed abolition – equating to one in three workers or one in every two working women.  But the new analysis, based on ABS data, highlights where the pain is felt most profoundly.  It shows:

·     24 of the 25 worst affected electorates are in regional/rural Australia.

·     In regional areas, 40 per cent of employees are affected, with over 30 per cent in metropolitan areas.

·     In the worst effected electorates, almost one in two employees are affected compared to less than one in five in the least effected metropolitan electorates.

The ISA analysis shows the damage to super balances for those on modest incomes in every electorate in every state:

	People impacted	% of total impacted	% of total women impacted	Estimated value of lost LISC p.a.
NSW	1,096,277	34.4%	43.3%	$297m
Vic	935,784	36.4%	46.1%	$249m
QLD	744,286	35.7%	46.6%	$203m
SA	291,800	38.5%	49%	$79m
WA	353,613	31.4%	44.3%	$93m
Tas	92,426	41.3%	52%	$25m
NT / ACT	79,952	24.5%	29.6%	$21m

Crucially, the new Senate will have a chance to consider this legislation after the swearing in takes place in early July.

ISA Chief Executive David Whiteley said today that it was not sustainable to have a “two-tier” system, with only middle and high income earners attracting a tax break on their super contributions.

“Retention of the LISC is necessary for the integrity of compulsory super. The reality is that until every Australian receives a tax concession on their super contributions, no other changes to the taxation of super will be accepted by the community at large.”

A hard choice for low income families and welfare recipients?

So which would you rather see happen – the Abbott Government continue with policies dismantling Australia’s ‘safety net’ welfare system (including Medicare) budget cut by budget cut or this federal government reduce superannuation tax concessions for the wealthy and very comfortably well-off?

I suspect Australians on Aged and Veterans Affairs pensions, the sick, those with disabilities, the unemployed and low income households generally would not find this choice a hard one to make.

A tax expenditure arises where a provision of the tax law causes a deviation from the standard tax treatment that would apply to an activity or class of taxpayer: that is, from the benchmark tax treatment [Australian Government, 2014-14 Budget Papers, STATEMENT 5: REVENUE]

According to an Australian Council of Social Service (ACOSS) paper presented at the National Tax Forum 2011:

* low income earner are penalised by the tax system for employer superannuation contributions, with zero tax support for these contributions, compared with a tax 
break of 32 cents per dollar contributed on behalf of a high income earner;

* almost 20% of superannuation tax concessions go to the top 2% of income earners (those over $150,000) almost 50% go to the top 12% of income earners;

* income over $180,000 per year attracts a flat tax rate of 15% (or 30 cents per dollar less than the marginal tax rate) on employer superannuation contributions;

* income attracting the top marginal tax rate of 45% results in tax concessions on superannuation of up to 30%; and

* Treasury research estimates that on average, high income earners receive a public subsidy for their retirement incomes (through tax breaks) over their lifetimes that exceeds the cost of paying them the age pension.

www.budget.gov.au/2014-15/content/bp1/download/BP1_BS5.pf

By the time the full raft of Abbott Government budget measures have come into effect, total superannuation tax concessions over the next four financial years will be in excess of $171 billion.

The next time someone tries to publicly argue that the Abbott Government, from Prime Minister through to lowly backbenchers, is not conducting class warfare I am going to (metaphorically speaking) spit in their eye if I see them in the street.

Watching your superannuation fail to perform as promised?

It will only get worse, because this is what Abbott Government Senator Arthur Sinodinos had organised (before he stepped aside as Assistant Treasurer for the length of the NSW ICAC Operation Credo-Spicer Investigation) in order to facilitate the gouging of workers’ superannuation by financial advisers and banks:

• remove the need for clients to renew their ongoing fee arrangement with their adviser every two years (also known as the 'opt-in' requirement);

• remove the requirement to provide an annual fee disclosure statement to clients in ongoing fee arrangements prior to 1 July 2013;

• remove the 'catch-all' provision from the list of steps an advice provider may take to satisfy the best interests obligation;

• facilitate the provision of scaled advice;

• clarify the meaning of ‘intrafund advice’;

• clarifying the operation of the 'mixed benefits' provisions; and

• amend the application of the ban on conflicted remuneration including:

– exempting general advice;

– exempting monetary benefits paid in relation to certain life risk insurance

offerings inside superannuation;

– amending the exemption for execution-only services to provide that only

advice provided by the party receiving the benefit is considered;

– broadening the exemption for training and education that relates to

operating a financial services business; and

– broadening the existing exemption for basic banking products to allow an

agent or employee of an authorised deposit-taking institution to access the

exemption in a broader range of circumstances.

______________

Documents:

Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014

Explanatory Memorandum

______________

The Abbott Government cannot pretend that it doesn't understand that this is a retrograde step.

In February 2003 the Australian Securities and Investment Commission released a report on a survey on the quality of financial planning advice which found:

A common observation by several judges was that clients’ interests did not appear to be the sole factor in the plan strategy or product selection. They characterised this practice as “commission-driven product selling, not impartial advice”.

“… like many others, [this plan] is just another ‘selling tool’ for managed

funds” – Judge 4

“This generic pro-forma style plan is [a] financial needs analysis / sales

justification document. “ – Judge 2

These plans often gave no reason why the recommended course of action was

preferred, or the reasons appeared skewed to justify the product recommendation.

“Plan seemed to focus straight to wealth accumulation via the advisor’s

company master trust. No explanation as to why, the pros and cons, and

how this recommendation was going to fully meet the client needs and

objectives.” – Judge 9

Recommendations frequently overlooked options that may be more cost-effective:

  • adviser elects to waive product entry fee — rarely recommended;

  • low cost superannuation funds — never recommended;

  • pay off mortgage rather than invest cash — rarely recommended;

  • salary sacrifice — recommended in a minority of plans.

About half the plans recommended selling at least some of the client’s existing

investments.

The combination of commission-based remuneration and management sales

targets sits uncomfortably with good practice and professional advice.

“The main recommendation was to rollover client’s superannuation into a

fund [master trust] from which the advisor receives commissions. No

analysis or discussion to justify this. ‘Churning’ in a newer guise.” –

Judge 7

“This plan is unusual in that it exhibits some degree of advice integrity, a

characteristic not commonly evident in many other plans reviewed. “ –

Judge 4

There appears to be a mismatch between what the consumers thought they were

getting and what they actually received. Our consumer volunteers asked for a

comprehensive financial plan....

Nor can the Abbott Government pretend that weakening or dismantling consumer protections found in the Corporations Amendment (Future of Financial Advice) Act 2012 does not have potential negative consequences.

One only has to look back at the 2009 $3 billion collapse of Storm Financial Ltd to see the personal and financial devastation for an estimated 3,000 investors left in its wake.

Retirees who lost money in the collapse of financial institutions are becoming angry about the Abbott Government's plans. However Abbott himself is insouciant.

The Guardian 18 March 2014:

Victims who lost billions in the collapse of financial advice firms such as Storm Financial are joining consumer groups, superannuant and seniors associations and industry superannuation funds in an angry backlash against the government’s plan to wind back new consumer protection laws.

The Coalition’s much-vaunted “repeal day” on Wednesday will include the Corporations Amendment (Streamlining of Future of Financial Advice) Bill to implement the windback – once again allowing advisers to earn sales commission and other so-called “conflicted remuneration” from providing general financial advice and removing the requirement for financial advisers to tell customers how much they are receiving in commissions every year and give them the chance to opt out of the arrangements every second year.

With the legislation certain to be blocked by Labor and the Greens in the existing Senate, which sits until 30 June, and many of the existing requirements set to take effect from July, the government is also planning to rush through regulations to try to implement its windback in the meantime.

The opposition leader, Bill Shorten, said the government’s proposed changes were “bad laws” and would mean “the wholesale dismantling of oversight to protect our consumers”.

But Tony Abbott said on Monday the former Labor government’s legal protection laws – which his government is seeking to water down – were “a classic case of regulatory overkill” because it was already an “ethical given” that professional advisers would take into account the best interests of their clients….

Any readers who may be thinking of lobbying against repeal of the Corporations Amendment (Future of Financial Advice) Act 2012 might like to view this new website, Save Our FOFA, which states that as part of our campaign to protect consumers, we want to help them lobby local MPs and senators.