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Tax deductible advice calls fall short

Lobbying by industry associations and financial institutions did not persuade the government to include measures to make financial advice tax-deductible in last night’s Budget.

Despite strong stands from influential organisations such as the Commonwealth Bank, TAL and Yellow Brick Road, as well as the advice industry associations, the Budget documents did not contain any provisions for incentivising Australians to take up financial advice.

Speaking to ifa from Canberra last night, FPA general manager, policy and standards, Dante De Gori, said the FPA was “not holding its breath” for such measures given that that “this Budget wasn’t about introducing new expenses, it was about curtailing the expenses of the government”.

However, Mr De Gori said his organisation will not be backing down from its lobbying efforts to introduce “some incentives or some appropriate tax measure to support consumers getting financial advice” – a move he says is particularly appropriate given the upcoming Tax Agent Services Act (TASA) requirements for advisers from July 1.

“We will be continuing that dialogue with the government to look at a process or a plan to potentially introduce the tax deductibility of advice fees,” Mr De Gori said. “Maybe it's a plan to introduce in a number of years' time but in conjunction with their efforts to fix the Budget I think also it's appropriate that discussions are had.”

Mr De Gori said the tax-deductibility push was likely to have more success once the TASA regime for financial advisers is “in full swing”.

Despite the government’s stated intention to raise the number of Australians in professional financial advice relationships, former assistant treasurer Arthur Sinodinos told ifa in February the government was not considering tax-deductibility of advice.