TASA exposes the divide between planners and accountants
If one issue has clearly defined the divide which continues to exist between financial planners and accountants, it has been the chequered passage of the Government’s Tax Agents Services Act (TASA) amendments.
Rarely in the past half decade have we seen such divergent positions adopted by the major financial planning and financial services organisations and the major accounting groups.
On one side we saw arrayed the Financial Planning Association (FPA), the Association of Financial Advisers (AFA) and the Financial Services Council (FSC).
On the other side we saw CPA Australia, the Institute of Chartered Accountants in Australia and the Institute of Public Accountants.
And what were they essentially arguing about? The timing of the implementation of those elements of the TASA legislation which impact financial planners who are, in any case, now subject to both the legislative and regulatory impact of the Future of Financial Advice changes.
It is perhaps worth noting that there were no similarly strident divergent views expressed between planners and accountants when it came to the debate around the accountants’ limited licensing regime, so the question of the provision of tax-related advice by planners is clearly viewed as a totem issue by the major accounting groups.
But in circumstances where the planning groups are not actually opposing their members being subject to the TASA legislation but merely seeking a longer phasing-in period, it is difficult to understand why the major accounting groups have chosen to be so strident.
Then, too, it might equally be asked why the Federal Government made TASA such a priority that it not only took up valuable time in the last four parliamentary sitting weeks before a Federal Election but also became the subject of on-again-off-again treatment in terms of its review by a Parliamentary Joint Committee.
Looked at objectively, nothing of particular significance turned on the passage of the legislation and no great harm was likely to be done by delaying its implementation with respect to financial planners who are, in any case, more tightly regulated than accountants.
The Shadow Assistant Treasurer, Senator Mathias Cormann, reflected during the Parliamentary Joint Committee review of the TASA legislation that it had appeared to give rise to a turf war between the accounting and planning bodies. This, however, probably over-stated the reality.
Observers of Parliamentary events will have noted that the Government sought to push a number of pieces of legislation through during the dying days of the current Parliament which owed their origins to deals struck as part of a broader Government policy agenda.
The legislation legally enshrining the use of the term ‘financial planner/adviser’ was the product of one such deal – and it is a fair bet the TASA legislation owed its passage to similar origins. Political debts may have been paid, but at what cost to the broader financial services industry?
Recommended for you
In the latest episode of Relative Return Insider, host Maja Garaca Djurdjevic and AMP’s Shane Oliver break down US and Australian rate cuts, soaring gold, and bitcoin’s volatility.
In the latest episode of the Relative Return Insider, host Maja Garaca Djurdjevic and AMP’s chief economist Shane Oliver unpack the surprising twists in the Australian economy, diving into the latest GDP numbers, what’s really driving consumer spending, and what it all means for the Reserve Bank’s next moves.
In this episode of Relative Return, host Laura Dew chats with Roy Keenan, co-head of fixed income at Yarra Capital Management, to discuss the evolving fixed income asset class, his sector preferences, and the RBA’s rate-cutting policy.
In this week’s episode of Relative Return Insider, AMP chief economist Shane Oliver joins the show to dissect the ongoing government economic reform roundtable and reflect on the wish lists of industry stakeholders – and whether there is hope for meaningful reform.
