The government’s hard-won repeal of the Future of Financial Advice package, by which it restored conflicted remuneration to the heart of financial advice and removed other pro-consumer reforms, looks set to be the first victim of PUP Senator Jacqui Lambie’s split from her party. The Senate will this afternoon likely vote yet again on a disallowance motion for the regulation, but this time the disallowance is expected to succeed with the backing of both Lambie and Victorian Senator Ricky Muir.
If successful, the repeal will be a win for good policy and common sense. The government’s gutting of FOFA, at the behest of the big banks, AMP and a rump of financial planners clinging to outdated business models based on gouging consumers, posed a direct threat not merely to consumers and their retirement incomes, but future generations of taxpayers through higher taxes to support an ageing population.
However, it will also signal that the Senate is now an even more difficult environment for the government to work with. Lambie is now a PUP Senator only in name, with Clive Palmer today demoting her and excluding her from his “party” room. Given Lambie’s personality, this was always a likely outcome, although it has happened in less than six months since Lambie took her place in the Senate.
The government is now visibly struggling. Its fiscal policy is a political disaster, and the much-vaunted switch to national security and foreign policy has failed to salvage its fortunes. If one of its few achievements of 2014 — however dubious — is overturned, it will face concluding the year in an even bigger mess than it started it.