Mr WATTS (Gellibrand) (16:25): A core role of government is to protect the vulnerable members of our community. It is to ensure that people placed in a vulnerable situation are not exploited by those they seek advice from. A key example of one of these vulnerable situations is the provision of financial services. Most Australians seeking to invest their money are not used to the ups and downs of the financial market. They need independent, impartial advice on where their money is best placed so they can enjoy a secure future. When advisers are incentivised through targets and commissions to recommend a certain financial product, despite the product's quality, it is hard for this independent advice to occur. In these circumstances there is a considerable risk of exploitation of these vulnerable investors. We saw this occur recently with the collapse of Storm Financial and other investment companies, where the savings of thousands of Australians around the country was lost as the questionable financial instruments they had invested in collapsed. After the global financial crisis it was recognised that protections needed to be put in place for these vulnerable investors, so the previous Labor government initiated a parliamentary inquiry into financial advice, products and services. This inquiry produced the Future of Financial Advice Act to strengthen the protections for inexperienced investors. FoFA required that advisers providing personal financial advice must act in the best interest of their client. It required advisers to ask their clients to 'opt in' if they wished to receive ongoing service every two years. Most importantly it put a ban on conflicted remuneration. This meant that advisers selling a certain financial product were not able to receive a commission for the sale of that product to the investor. This ensured that financial investors would provide the impartial advice that retail investors so badly needed. The Abbott government has wasted no time in attempting to role back these crucial protections for consumers who are seeking financial advice. Their attempts so far have been a classic example of how not to execute legislative change. This demonstrates to the Australian people once again the inability of the Abbott government to switch from opposition to government. Firstly, they announced in the last few days before Christmas that they would make changes to the legislation. Like many Abbott government policy moves, this was done without any consultation with interested stakeholders. They did it without talking about the changes with consumer groups, or industry groups, or seniors groups. Clearly, former Assistant Treasurer Arthur Sinodinos pled that consulting his previous colleagues in the banking world was sufficient. Nothing else was needed to strip protections away from a vulnerable group of investors. The Abbott government pulled out the usual tactic in relation to this legislation, which was to not talk about it in the hope nobody would notice it until it was passed. They did not count on the community backlash from industry experts, consumer advocates, seniors groups, and previous victims of dodgy financial practises, who all condemned the governments actions. Even those within their own party disowned the reforms. Peter Collins, the former leader of the New South Wales Liberal Party, and now the head of Industry Super Australia, was unequivocal in condemning these proposed changes. As pressure from the community mounted we saw the response of the Abbott government shift back and forth, from supporting the changes to abandoning them, with the schizophrenic attitude of a government that just does not know how to govern. The former Assistant Treasurer Arthur Sinodinos was asked to resign, as his failure to answer questions in the Senate became a thorn in the Abbott government's side. Government members interjecting— A government member: He asked to resign. Mr WATTS: Feel free to clarify: has he resigned or not? The Abbott government took this as an opportunity to use Minister Mathias Cormann to push the changes once more. It was reported to the Australian Financial Review only yesterday that the Abbott government would: … aggressively defend its ambitious unwinding of Labor's future of financial advice (FoFA) laws … Minister Cormann even wrote an editorial in the Financial Review expanding the merits of its recent reforms. The next day the attitude of the Abbott government had changed completely. The Financial Review reported this morning that the Abbott government: … has frozen plans to immediately implement changes to laws banning commissions for financial advisers … This was in direct contrast to Minister Cormann's statement on Twitter yesterday, when he claimed that this freeze had been in the work since Friday of last week. I find it unlikely that nobody in his office could get to the article before Monday to prevent his valiant defence of the FoFA reforms being printed. This is if we are charitable, and assume the op-ed was not written after he had allegedly 'changed his mind'. The Abbott government's eleventh-hour decision to freeze the changes in the FoFA act shows that they are a government that do not know how to govern. They think a three-word slogan, not stakeholder consultation, is what is needed to form government policy. When these policies do not hold up in the harsh light of day, the cohesion of the Abbott government crumbles under pressure. The Prime Minister needs to take responsibility for the botched way this policy has been handled. He needs to acknowledge to the Australian people that these reforms are both unwelcome and have been badly run. The Abbott government should not just freeze these reforms; they should throw them on the same bonfire that they claim to be throwing red tape onto in Australia and put an end to them once and for all.