THE HON JOSH FRYDENBERG MP
20 December 2019
TAKING ACTION ON THE BANKING, SUPERANNUATION & FINANCIAL SERVICES ROYAL COMMISSION – RECOMMENDATION 7.1: ESTABLISHMENT OF A COMPENSATION SCHEME OF LAST RESORT
The Coalition Government has today released a discussion paper on establishing a Compensation Scheme of Last Resort.
This is another step forward as part of the Government’s continued action on all 76 recommendations contained in the Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
In his Final Report, Commissioner Hayne recommended that the Government adopt the three key recommendations of the Supplementary Final Report of the Review of the financial system external dispute resolution and complaints framework (Ramsay Review).
In its response, Restoring trust in Australia’s financial system, the Government agreed to take action on recommendation 7.1 and establish an industry-funded, forward-looking compensation scheme of last resort.
Implementation of recommendation 7.1 will build trust and confidence in the dispute resolution framework in the financial system. It will ensure that when disputes are determined in favour of individual and small business consumers the compensation will be paid, even if the financial firm becomes insolvent.
Through this consultation process, the Government will seek feedback on the proposed model for establishing the Compensation Scheme of Last Resort and the most appropriate way to implement
Commissioner Hayne’s recommendation.
The Coalition Government has agreed to take action on all 76 recommendation contained in the Royal Commission’s Final Report and, in a number of important areas, is going further.
Restoring trust in Australia’s financial system is part of our plan for a stronger economy.
The discussion paper is available on the Treasury website. Consultation closes on 7 February 2020.