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A word of financial advice: don't trust the government


Jenna Price

Senator Fiona Nash’s chief of staff (a junk food lobbyist) insisted on the removal of a government website with food ...

Senator Fiona Nash’s chief of staff (a junk food lobbyist) insisted on the removal of a government website with food star ratings based on health information. Photo: Andrew Meares

I used to love you but it’s all over now.

Australians have lost trust in government - and that’s a clear finding revealed in new research from the Australian National University. Ian McAllister, professor of political science at ANU, says Australia has a regular pattern when it comes to whether we trust governments.

What does he mean by trust?

McAllister has run the Australian Election Study (AES) for years - and each time voters are surveyed, they are asked how they feel about two statements.

The first is: “People in government can be trusted to do the right thing.”

The second is: “People in government look after themselves.”

Voters get to choose from a usually/sometimes range; and, in the past, we mostly thought people in governments could be trusted. We also trusted politicians to look after the public’s interest before they looked after themselves.

Immediately after the election of a new government, there is usually a spike in trust in the AES. Not last time; and there’s been a downward trend since 1996.

For 20 years, we gave the benefit of the doubt to politicians. We said that we did not agree that they “look after themselves”. That’s changed too - and now we have the biggest trust gap this country has had in 20 years. Just under 70 per cent of Australians now think politicians usually look after themselves (and not us, so much); and just over 30 per cent think they can be trusted.

It’s not just a Liberal Party effect - although the missing spike in trust after the most recent election was telling; Australians clearly knew what was coming. What I’m about to write can so easily be applied to the Labor Party as well as the Liberals but there is not much time for whining about an opposition since it has so little power.

Politicians let us down almost every day. They are so busy operationalising their pragmatism, they forget it’s their ideals we voted for. We have, in the past, trusted politicians to put citizens first and themselves last.

And that’s in the face of us all recognising that Australia has many groups with diverse and competing interests - it’s small business versus big business; it’s those who believe in an inclusive society against those who want to maintain and power controlling elites.

But beyond the big questions, what does it mean if the government betrays you?

Let me offer two specific examples where corporate interest won over the interest of citizens since the federal government came to power: the changes to the Future of Financial Advice legislation and the appalling removal of public health advice from a government website because of perceptions of corporate interest.

Example one: Senator Fiona Nash’s chief of staff Alastair Furnival (a junk food lobbyist) insisted on the removal of a government website with food star ratings based on health information. No discussion with anyone who knew anything about health information - just the disappearance of vital public health information.

“Why would a government stop people from knowing unless it’s actually in bed with industry,” asks Michael Moore, chief executive officer of the Public Health Association of Australia.

It was that premise which led Moore and others on a nationwide public campaign to reinstate health stars - and now he predicts that the website will return soon, after a meeting this Friday of state and federal health ministers.

“I’m giving it a 90 per cent chance because governments around Australia felt the pressure from the public - it’s so damned obvious that a simple effective rating system is something we ought to know.”

He’s understanding of the corporate position - after all, it’s not in the corporate interest to reveal information which might impact on profits - but he doesn’t accept it.

So if the votes fall the right way on Friday, that will be a win for people versus profits. But what of the other betrayal, changes to the Future of Financial Advice?

These are not as simple to understand - and not so immediate.

But according to Seniors Australia, the FOFA amendments will affect us all in the end. Financial planners will no longer have to tell you that you are paying a commission for services you don’t get. That’s right. You may pay for stuff you are not getting.

Financial planners won’t have to put your needs first - so they can encourage you to put your money somewhere which might pay planners a hefty commission but not necessarily fund your retirement in the best way possible.

The old FOFA made sure that old clients would get the new transparency benefits - now that will only be available to new clients. And it will allow advisers to push particular products, no matter the client’s individual circumstance.

On top of that, the changes will cost us $533 million a year (and business just $190 million a year).

We can’t write off these losses.

National Seniors chief executive Michael O’Neill says exactly what Moore said: “The Abbott government has clearly put big business ahead of consumers”.

But he also thinks that the government’s refusal to budge will undermine public trust in financial advisers. Without appropriate legal protections, Australians will find themselves cheated at every turn.

“ [They are] finding themselves either weighed down by hidden fees or, on the back of shoddy, commission-driven advice, destitute in retirement”.

Financial advice isn’t quite as simple as what you put in your mouth - but in the long run, it can damage you just as much. Your financial adviser could well be a heart attack waiting to happen.

  Twitter @jennaprice or email


  • Another topical example is school chaplains.

    Even after two negative High Court decisions, Shorten is happily horse trading with Abbott over the fine details of the program, and stuff the law or the electorate.

    Date and time
    June 24, 2014, 10:49AM
    • I agree, and you know if any government gets the church to pay income tax, they could leave the pensioners and unemployed alone, forever, period.

      Church tax rort
      Somewhere near you
      Date and time
      June 24, 2014, 12:11PM
  • The Abbott government is a disaster. Bring on a double dissolution. I have no doubt whatsoever they would be ousted. Let the people put their vote to the government's performance. This is the most deceitful and arrogant government ever to have lied it's way into power.

    Date and time
    June 24, 2014, 11:10AM
    • We not only need a double dissolution but a new way of forming government.

      Certainly oust the Institute of Public Affairs from running the show, but we must have some rational, forward-thinking to replace the backward and self-centred views of the IPA and its secret funders (although we know its Murdoch, Rinehart and other miners).

      And it won't be good enough to simply have Labor back running the show, even though people like Plibersek are gems and are good for the country.

      We must have a Speaker who is not a dullard and not a politician. It's a job for a real judge.

      And lastly, the one thing Abbott has taught us all is that we will never again trust a politician. so, we must make politicians accountable under a federal Consumer Act and a Corruption Commission.

      Date and time
      June 24, 2014, 11:57AM
    • Bet you said the same thing about The Howard Government, The Fraser Government and The Menzies Government. Common thread emerging here...

      Mantra Repeat
      Date and time
      June 24, 2014, 1:01PM
  • The trouble is that 90% of financial planners give the rest a bad name.
    In their ideal world they would be given complete control over our life savings and investment decisions. In our interests of course.
    The ATO analysis of SMSF performance demonstrates the average self-funded retiree is doing quite well relying on their own judgement and common sense.
    Much to the alarm of the financial planning industry.

    Self-funded retiree
    Date and time
    June 24, 2014, 11:37AM
    • Sometimes one wonders if all the decent people in politics have been knocked off by the political thugs who remain.

      Last nights 4 Corners report should be compulsory viewing and a spotlight should be put on our Federal politicians particularly Abbotts mob since they are inextricably linked to Sinodinos, Di Girolamo and the large, illegal slush funds still to be completely exposed. None of these Liberals should walk away unpunished, but watch it happen before your very eyes as political power continues to be misused.

      Australias government is proven to be mendacious, systemic rorters, secretive, misleading, driven by self-interested and ill-formed ideology.

      That is why Australians are consistently taking to the streets to protest against Abbotts government. Today 24th June across the nation people will be marching again. If the numbers are down it will because a harsh, cold front is about to hit. Prophetic really.

      6th July there is a national Bust The Budget march. 30/31 August March Australia rallies across Australia to totally reject Abbotts government. And there's more - others can add to this list.

      Date and time
      June 24, 2014, 11:45AM
      • The precedent that Kormann and Hockey are setting is a real worry.

        So if financial planners don't have a responsibility to their clients, why doctors?

        Or lawyers, dentists, car mechanics, electricians?

        The banks will end up like the catholic church - a little but of care when it suits them, but no responsibility.

        Date and time
        June 24, 2014, 1:33PM
        Comments are now closed
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