The Albanese Labor Government’s silence and inaction on the Consumer Data Right (CDR) is holding back this crucial cost of living relief and competition initiative.

After fourteen months of neglecting a key part of his portfolio, Assistant Treasurer Stephen Jones will finally break his silence at an event on Friday billed as his “first public remarks on CDR since June 2023”.

If the Assistant Treasurer rolls out more of the same platitudes about doing “the work to get it right” but again refuses to progress any of that work, the Albanese Government has effectively abandoned the CDR and failed the consumers and small businesses who stand to benefit from it.

Banks and energy providers have made a significant investment in the CDR – an investment which has the potential to set Australia’s digital economy up for the next century. However, this investment must be coupled with strong leadership from the Government and the support of the responsible minister.

Instead, the Albanese Government’s record on the CDR is a litany of stalled or abandoned projects led by a minister who is simply not interested:

•Expansions to insurance, superannuation and telecommunications have been abandoned.
•The Government’s own “action initiation” legislation to expand its functionality has languished in Parliament since its introduction in November 2022.
•The non-bank lending sector has been left in regulatory limbo with rules to expand CDR to include them stalled since August 2023.
•A promised education campaign to help consumers to easily identify CDR‑enabled providers, products and services never eventuated.
•The most recent consultations on improving the CDR and phasing out screen scraping have not progressed since August 2023.
•No new consultations on improving the CDR since August 2023.

In his June 2023 speech, the Assistant Treasurer said “right now, you can use your CDR data to get a better deal on your credit card, find a cheaper mortgage, and understand your energy usage” and that “an extensive architecture has been built, designed to expand and scale out.”

Fully aware of the benefits CDR can provide, the Labor Government’s failure to prioritise, support and scale it is compounding Australia’s cost of living crisis and sticky, home grown inflation.

Shadow Treasurer Angus Taylor said this is just another example that Labor’s competition agenda is more about spin than substance.

“With quarterly inflation rising again, it is baffling that the Labor Government isn’t using every lever it can to bring cost of living down.

“The Coalition implemented the CDR and since coming into Government, Labor has completely botched the roll out of a program its own Ministers’ described as a ‘game changer.’
“Australian consumers are paying the price for Labor’s lack of leadership.”

Shadow Assistant Treasurer and Shadow Minister for Financial Services said Labor’s inaction on CDR is yet another broken promise.

“Over the last two years the Albanese Government has pumped the brakes on its rollout and stalled its progress without explanation, creating regulatory uncertainty across the financial services sector.

“There is no leadership or plan from the Albanese Government and the ecosystem of innovative businesses supporting the CDR is suffering as a result.”

Shadow Assistant Minister for Treasury, Charities, and Competition, Senator Dean Smith said the Government’s delay in enacting CDR Legislation is denying Australian consumers the benefits of enhanced competition in the banking and energy sectors.

“The Coalition has forced the CDR back on the legislative agenda, and swift passage of the legislation next week will be a step towards improved competition outcomes for the economy at a time where Australia’s competition landscape is languishing.

“Australian consumers are paying a high price for Labor’s inaction and their delay is further proof that this Government fails to understand the levers that will drive improved productivity, bring down cost of living pressures, and improve living standards.”

Opposition assistant treasury and financial services spokesman Luke Howarth has backed calls for reforms to the corporate regulator, laying out a vision for less regulation and red tape for the financial sector.

Speaking to The Australian, the Queensland Liberal National said Australia was “overregulated” and the financial sector was buckling under the weight of rules and regulations that, while well meaning, had clamped down on business activity.

“We should say where possible regulation is streamlined and not adding unnecessary costs to family businesses,” he said.
“Every time regulation is implemented, it adds to workload and cost of business and it is passed on to end users.”

Mr Howarth, who was handed his role in a reshuffle in March, said he was concerned about the shape of several financial sector reforms ushered in by the Albanese government.

These included the Compensation Scheme of Last Resort, with Mr Howarth saying the inclusion of victims of the Dixon Advisory collapse risked driving costs “through the roof”.

The CSLR offers up to $150,000 to eligible customers who can’t make a claim through the Australian Financial Complaints Authority.

This results in financial planners being forced to cover the cost of Dixon’s collapse, in a move expected to add almost $65m to the cost of the CSLR.

“The government needs to look at reducing the costs,” Mr Howarth said.

“They have more than doubled since the Coalition left office.”
Mr Howarth also took aim at Assistant Treasurer Stephen Jones and a series of reforms to financial advice outlined by the government.

Mr Howarth said reforms to financial advice were overdue, noting there had been “stuff-ups” in their implementation.
“The industry is waiting on the second tranche for the changes from the quality of advice review,” he said.

Mr Howarth also took aim at recent changes to rules around the Tax Practitioners Board, saying they risked putting “new burdens on accountants”.

The 52-year-old said reforms, aimed at dealing with the scandals around the big four consulting firms PwC, KPMG, Deloitte and EY, should be confined to the audit and consulting giants.

Liberal senator Andrew Bragg has run the ruler over the Australian Securities &Investments Commission, publishing a report in June making 11 recommendations to reform the regulator.

Mr Howarth said Senator Bragg’s recommendations were not Coalition policy, but the party supported many of them, highlighting five recommendations.

Assistant Treasurer Stephen Jones has launched a fresh assault on financial services professionals – this time directed at tax practitioners.

Local accountants, bookkeepers and tax agents have been given just weeks to comply with a raft of “unrealistic and unachievable” new obligations.

Starting on 1 August, Jones’ red tape bomb for tax practitioners will subject them to a range of vague, inconsistent and duplicative requirements.

Most concerning is a new requirement to keep current and prospective clients informed about any matter that could significantly influence a decision of a client to engage their services. This requirement is retrospective, with tax practitioners needing to consider matters as far back as 1 July 2022 to determine what needs to be disclosed.

Chartered Accountants ANZ has raised concerns that “any matter can include matters of a private nature like health, religion, sexual orientation, political persuasion or even sporting affiliations to name a few.”

Many of the new obligations were not consulted on before they appeared without notice earlier this month. The regulator, the Tax Practitioners Board, is also yet to issue any guidance.

The new power the Assistant Treasurer has used to unilaterally sign off on the new obligations was part of legislation forced through Parliament late last year by Labor in a deal with the Greens – legislation the Coalition opposed.

Shadow Assistant Treasurer and Shadow Minister for Financial Services Luke Howarth said rushed and botched overregulation has become the norm under the Albanese Government.

“Labor’s war on financial services professionals must end. After botching long awaited reforms to reduce red tape for financial advisers, the Assistant Treasurer has turned his attention to attacking local accountants, bookkeepers and tax agents.

“During a cost-of-living crisis, this overregulation will be yet another unnecessary cost to be passed on to individual consumers who are already doing it tough. Only a Coalition Government will put a stop to this overregulation which is causing uncertainty and a mountain of additional costs.

“With a start date of 1 August, accountants have been left with little time to prepare and comply with the Assistant Treasurer’s new obligations. At the busiest time of the year for many tax practitioners, they have received a red tape bomb from the Albanese Government.

“Some of these new obligations are far-reaching and potentially impossible for thousands of small tax practitioners to comply with. In his haphazard attempt to address bad behaviour from a few large international accounting firms, the Assistant Treasurer has caused chaos and confusion for the rest of the industry.

“Even if the Albanese Government is hellbent on stacking up more red tape for small businesses, the least it can do is implement regulatory changes fairly and ensure there are no unintended consequences.

“This is yet another rushed process, without consultation and riddled with errors. The Assistant Treasurer needs to start listening to industry from the beginning and consult with his stakeholders.

“The Coalition calls on the Labor Government to urgently withdraw the legislative instrument which makes these changes and conduct further consultation before it considers burdening local accountants and bookkeepers with more red tape.”

Background:
•On 11 July, the Tax Practitioners Board announced a new Ministerial power to expand the obligations in the Code of Professional Conduct (Code) for tax practitioners had been used by Assistant Treasurer Stephen Jones to create eight additional obligations to supplement the existing Code.
•The Tax Agent Services (Code of Professional Conduct) Determination 2024 imposes additional obligations on registered tax and BAS agents (tax practitioners) under the Code in section 30-10 of the Tax Agent Services Act 2009 (TASA). The additional obligations commence on 1 August 2024.
•Chartered Accountants Australia and New Zealand, CPA Australia, Institute of Public Accountants, The Tax Institute, Australian Bookkeepers Association, Institute of Certified Bookkeepers, Institute of Financial Professionals Australia,
Financial Advice Association of Australia, NTAA PLUS and SMSF Association (collectively the Joint Bodies) wrote to the Assistant Treasurer on 15 July 2024 to express strong concerns about the construct and implications of the provisions of the determination. The Joint Bodies described the commencement date of 1 August 2024 as “unrealistic and unachievable for many tax practitioners”.
•Industry organisations have requested the Minister withdraw the LI as registered, and conduct further targeted consultation on the LI to ensure that the new measures can be fairly implemented and that there are no unintended consequences for tax practitioners or the regulator, the Tax Practitioners Board (TPB).

The Coalition has successfully forced the “game changer” Consumer Data Right (CDR) policy back onto the legislative agenda, after the Albanese Labor Government left the reforms languishing since its introduction in 2022.

After more than fourteen months dormant in the Senate without debate, despite tri-partisan support for its passage, a Coalition motion has guaranteed that the CDR, a crucial cost of living relief measure, will now be considered when the Parliament returns in August.

Passage of the Treasury Laws Amendment (Consumer Data Right) Bill 2022 would facilitate “action initiation” under the Consumer Data Right. The reforms would allow consumers in energy and banking to direct accredited persons to securely instruct on actions on their behalf, such as making a payment, opening and closing an account, switching providers and updating personal details.

With inflation continuing to rise and the cost of living and doing business getting worse, this “action initiation” reform should be a top priority for the Labor Government. Promoting consumer choice and greater competition is essential to bringing down prices and the CDR represents a new, secure channel for consumers to control their data and switch to a better deal.

At Senate Estimates last month in June, Senator Katy Gallagher committed to dealing with the Bill in the June sitting block. Treasury officials also provided evidence that to their knowledge “there are currently no plans to change the bill as it is”. However, the Coalition’s motion was ultimately required to force the Bill back onto the agenda.

In its bi-partisan recommendation for the Bill’s passage, the Senate Economics Legislation Committee said: “…this framework legislation will place consumers at the centre of an innovative data-sharing system that protects their privacy.”
Since coming into power, the Albanese Labor Government has treated this key competition initiative with contempt by pausing expansions of the CDR into insurance, superannuation and telecommunications, and indefinitely delaying expansion into the non-bank lending sector.

BACKGROUND
The Treasury Laws Amendment (Consumer Data Right) Bill 2022 was first introduced into Parliament in November 2022 and received a bipartisan recommendation for its passage from the Senate Economics Legislation Committee in March 2023.
At Senate Estimates in August, Senator Katy Gallagher committed to dealing with the Bill in the June sitting block. The Government did not bring the Bill on for debate or pass the Bill.

Action initiation was originally recommended in Dr Scott Farrell’s 2020 Inquiry into Future Directions for the Consumer Data Right.

A recent Deloitte report, commissioned by the Commonwealth Bank of Australia, found the Australian economy would be $16.7 billion larger by 2043 if the Consumer Data Right expands beyond banking and energy sectors, with approximately 46,800 additional jobs created from the combined effect of greater competition and innovation.