The Australian Securities and Investments Commission (ASIC) and the Australian Taxation Office (ATO) have received a $1.4 million federal Budget allocation to set up an online register for financial advisers who provide tax advice, but industry bodies have questioned whether it’s enough.
The allocation was announced in the 2013 federal Budget, handed down by Treasurer Wayne Swan yesterday and aims to assist with the process of registering as a “tax adviser” under the new rules set out under the Tax Agents Services Act (TASA).
According to Budget documents, the “cost of this measure will be offset by fees charged by the ATO for registering financial advisers under [TASA] from 1 July 2015”, with $400 charged for a three-year registration for a “Category 2 financial adviser who carries on a business as a Category 2 financial adviser”; and $200 for a three-year registration for a “Category 2 financial adviser who does not carry out a business as a Category 2 financial adviser”.
Dante De Gori, general manager (policy and conduct) at the Financial Planning Association (FPA), welcomed the Budget allocation, but said more clarity and funding was needed on the TASA regime.
“To the extent that this has been designed to take some burden off the Tax Practitioners Board (TPB) in their registration process this funding is a good thing, but it does not mean that the TPB will be ably funded to actually regulate financial advisers,” he said.
“This is just a funding exercise; the bigger question is how this is going to work, how big the net is and who is included - we’re only a month away from end of financial year.
“Our fear is that the government is going to push this through at the expense of actual practical legislation that can work.”
De Gori said that while the fees announced in the Budget documents will not have to be paid for three years, they may be just another regulatory burden for advisers.
“It’s not satisfactory that advisers have to again fork-out money because of regulatory change,” he said, adding that the industry is already burdened by the costs of the Future of Financial Advice regime.
Association of Financial Advisers spokesperson Phil Anderson also said that the allocation does not answer crucial questions about the impact of TASA on financial advisers.
“It’s good they’ve agreed to spend on that, but the impact of TASA on financial advisers, that exercise is still being worked through with Treasury,” he said. “What’s still unclear is how many people will need to be registered.”
Anderson said that because the definitions of who is included in the definition of “tax adviser” is still unclear, he is not in a position to comment on whether the $1.4 million allocation is sufficient.
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