House of Representatives

Revised Explanatory Memorandum

(Circulated by authority of the Minister for Revenue and Financial Services, Minister for Women and the Minister Assisting the Prime Minister for the Public Service, the Hon Kelly O'Dwyer MP)

Chapter 4 Statement of compatibility with human rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Treasury Laws Amendment (Putting Consumers First-Establishment of the Australian Financial Complaints Authority) Bill 2017

4.1 This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

4.2 This Bill will amend the Corporations Act and other Commonwealth Acts to introduce a new EDR framework and an enhanced IDR framework for the financial system.

4.3 Schedule 1 and 3 of the Bill introduce the new EDR framework, which will ensure that consumers have easy access to a single EDR scheme, known as AFCA. The AFCA scheme will resolve disputes about products and services provided by Financial Firms and will replace the SCT and the existing EDR schemes approved by ASIC.

4.4 Schedule 2 of the Bill introduces an enhanced IDR framework, which will require IDR Firms to report their IDR activities in accordance with ASIC requirements and allow ASIC to publish information it receives under the new reporting requirements. This will allow ASIC to improve transparency about the performance of IDR Firms in relation to their IDR activities.

Human rights implications

4.5 This Bill does not engage any of the applicable rights or freedoms.

Right to a fair trial

4.6 While Schedule 3 of this Bill will repeal the Superannuation (Resolution of Complaints) Act 1993, and as a result, abolish the SCT, the right to a fair trial for persons with a superannuation complaint will not be impacted.

4.7 The amendments in Schedule 1 of the Bill allow the Minister to authorise an EDR scheme for the purposes of the new framework. The Minister is required at the point of authorisation to, amongst other matters, take into account whether the scheme will provide fair, efficient, timely and independent dispute resolution. The Minister must also have regard to the 'general considerations' which include the fairness and independence of the scheme.

4.8 As well as being a matter that must be considered by the Minister at the point of authorisation, the requirement to provide fair, efficient, timely and independent dispute resolution is an ongoing requirement that AFCA must comply with. Where AFCA does not satisfy this requirement, ASIC has a general directions power that can be used to compel compliance.

Arbitrary or unlawful interference with privacy

4.9 The amendments in Schedule 2 of the Bill require IDR Firms to report their IDR activities in accordance with ASIC requirements and allow ASIC to publish the IDR activity information of particular IDR Firms. However, these amendments ensure that the information that must be reported and that may be published must not include personal information.

4.10 Therefore, these amendments do not engage any of the applicable rights or freedoms.

Conclusion

4.11 This Bill is compatible with human rights as it does not raise any human rights issues.