The AFA made a submission on 7 October 2022, in response to the Senate Economics Committee Inquiry into the Compensation Scheme of Last Resort legislation that was tabled in the Parliament on 8 September 2022. The CSLR will result in another Government charge for advisers.
The legislation largely reflects the CSLR Bill that was tabled by the former Government last year that was never debated and thus never passed. Our submission largely addressed the same issues that were included in our previous submission in response to the former Government’s legislation, including:
- More should be done to enforce payment of unpaid AFCA determinations.
- The scheme should include Managed Investment Schemes, rather than a tight focus upon intermediaries.
- The establishment and operating costs of the CSLR should be spread across all AFCA participants.
Please click here to see a copy of the AFA’s submission.
The Senate Economics Committee issued their report in response to this inquiry on 24 October 2022. The majority report recommended the Bills be passed without amendment. The Coalition Senators raised some concerns about the legislation, including the issue of moral hazard. They recommended that AFCA and the CSLR be subject to greater oversight and that the CSLR be truly a scheme of last resort.
The three Bills related to the CSLR have been passed in the House of Representatives and have been introduced to the Senate and are awaiting debate.