Labor has demanded Prime Minister Tony Abbott take a controversial rollback of financial advice laws out of the deep freeze and put it on the scrap heap.
Finance Minister Mathias Cormann says the government has put the changes on ice temporarily until he undertakes further consultation with stakeholders.
“We remain committed to implement the improvements to (Future of Financial Advice laws) which we took to the last election as soon as possible,” the minister told AAP on Monday.
Senator Cormann took charge of the issue after Assistant Treasurer Arthur Sinodinos stepped down last week pending his appearance as a witness before two anti-corruption inquiries in NSW.
Opposition Leader Bill Shorten said the government had been deaf to the concerns of industry experts, consumer advocates and previous victims of dodgy financial practices.
“The prime minister should dump these changes just like he’s dumped its champion Arthur Sinodinos,” he said.
“This has been a nightmare from the start.”
The proposed changes have divided the industry, with the Financial Planning Association strongly opposing the payment of commissions under the general advice exemption proposed by the government.
It described the change as a retrograde step that would open the door to mis-selling and inappropriate advice.
Senator Cormann there was some misinformation about the changes and some was deliberate and mischievous.
“We are not proposing to get rid of the requirement that financial advisers act in the best interest of their clients,” he said.
Nor was the government proposing to reintroduce commissions or other conflicted remuneration structures for financial advisers providing personal advice.
Senator Cormann said Labor’s laws had cost the industry in excess of $1 billion, with ongoing annual costs of more than $350 million.
Industry Super Australia chief executive David Whiteley said the freeze was a timely circuit breaker and a victory for common sense.
He said gaining industry consensus on the regulation of financial advice will ultimately boost consumer confidence.