Challenge to new financial laws
The ALP has made a last-minute challenge to the Financial Services Reform Act, passed last year, following complaints by the Australian Consumers' Association and other groups that the regulations have been made weaker. The ACA is backing the ALP, saying that the new regulations are “inadequate and potentially misleading”.
The Government now has to reach a compromise with the ALP by August, or get the support of minority parties in the Senate, to pass the regulations again. The Democrats say they are unlikely to support Labor's stand, as the Act had already been thoroughly debated.
The ALP specifically objects to two facets of the legislation: the weakening of regulations on banks and insurance companies cold-calling people in their homes after business hours; and rules on the disclosure of fees by financial institutions. Labor wants the ban on cold-calling, currently before 8am and after 9pm and on certain religious holidays, to be extended to Sundays, with late-night calling to be cut off at an earlier time.
The party also wants financial institutions to disclose all fees and report them as dollar amounts, and to extend this requirement from superannuation to other types of managed funds.
The Investment and Financial Services Association has attacked the ALP's actions, stating that they will bring about a three-month “black hole”, during which time there would be no protection for consumers.