Tuesday evening’s federal budget was, as is becoming customary, something of a non-event for financial advisers.
In an effort to secure some relief from the rising cost of running an advice business, the Financial Advice Association Australia (FAAA) put together a budget wish list, which included a fairer Australian Securities and Investments Commission (ASIC) funding levy, managed costs for the Compensation Scheme of Last Resort (CSLR), improved tax deductibility for financial advice, increased support for adviser education, and a reversal of proposed changes to reduced input tax credits for advice fees.
Unfortunately, this fell on deaf ears.
On Tuesday night, FAAA chief executive Sarah Abood expressed disappointment in the government continuing to ignore the financial advice profession’s calls for relief.
“Minister Stephen Jones has acknowledged the importance of financial advice but there is little remedy for the skyrocketing costs that advisers have been and will continue to pay,” Abood said.
“Much of these costs will inevitably be passed on to consumers, further raising the cost of professional financial advice that more Australians need more than ever.”
In fact, financial advice was not mentioned once in either Treasurer Jim Chalmer’s speech or the hundreds of pages of budget documents.
That’s less than sweet potatoes, which not only got a mention but a levy reduction.
From 1 July 2024, the government will decrease the marketing component of the agricultural levy and charge on sweet potatoes from 1.0 per cent of sale value to nil. This change will decrease the overall levy rate on sweet potatoes from 1.5 per cent to 0.5 per cent.
Phil Anderson, FAAA general manager policy, advocacy and standards, said this “was a bit symbolic”.
Indeed, if anything, levies on advisers will increase as a result of the budget.
Among the increases to ASIC’s funding in the budget was $206.4 million over four years from 2024–25 (and $7.2 million per year ongoing) to improve the data capability and cyber security of the Australian Prudential Regulation Authority (APRA) and ASIC, and to continue the stabilisation of business registers and modernisation of legacy systems.
“The cost of this measure will be partially met from cost recovery through ASIC and APRA industry levies,” the budget documents noted.
Anderson particularly noted the funding for registers as important for advisers.
“There was supposed to be a transfer of the registers from ASIC to the ATO that the government then decided not to do and obviously, this particular one signals that the government is looking at enhancing or rebuilding the registers within ASIC,” Anderson said.
“I think anytime they are going to provide additional money to ASIC, unless they say otherwise, we can assume that there’s a risk that it will be caught in the industry funding levy.
“Where it refers to registers, we have the AR register, we have the financial adviser register, we probably pick up a proportion of the cost of the AFSL registers. So, they are going to charge us.”
He did note that “we’ve always got to be supportive of tax reductions”, adding that the “small amount” of energy rebates is good from a cost-of-living perspective, and reiterated the FAAA’s support of Digital ID and AML/CTF measures.
However, “it’s a bit tough trying to find something to be excited about”.
It’s a shame that so many people throwing stones at the FAAA, or any other industry association, hide behind the ‘anonymous’ tag.
Sweet potatoes can be boiled, fried & mashed.
Financial Advice has had all 3 from every Govt for the last 20 years.
Interestingly, sweet potatoes have a low GI ( glycemic index) and Financial Advice has a low GI ( general interest).
What a disgusting, disgraceful unmitigated, disgrace.
I feel physically sick.
Unfortunately it’s been apparent for some time that the humble spud holds more influence in our parliamentary corridors than the FAAA. At least the potato doesn’t pretend to be our industries biggest advocate!
One of the greatest headlines ever! Well done!
clearly, even after the amalgamation, our peak industry body (and aligned media) are toothless and lack the muscle required to fight for our industry
In the meantime ASIC getting over $300 million from adviser AND over $400 million from litigation while our Levy (Tax) RISES. No other country in the WORLD makes it MORE DIFFICULT and COSTLY for Advisers who do not want to be vertically integrated or put Super Funds before their clients. Disgusting and a global embarrassment
That is simply wrong. In 2022/23 the adviser levy was $55 mil not $300 mil.
Fines in the same period were $372 mil not over $400 mil – and the vast majority of that was paid by the big banks not by financial advisers.
$469 million of taxpayer money in this budget (according to SkyNews) is allocated toward investigating graft/fraud in the NDIS.
Meanwhile in financial adviser land…..we pay for our own policing, funds recovery action and are expected to pay toward those who have been victims of dodgy providers.
This observation is ridiculous.