The Federal Opposition is claiming victory on the Tax Agents Services Act (TASA), with the Shadow Assistant Treasurer, Senator Mathias Cormann, saying the Government has conceded all the Coalition’s demands on the legislation such that it will now support its passage through the Parliament.
The Government’s concessions have been confirmed in a letter to Cormann from the Assistant Treasurer, David Bradbury, with key amongst them being a further 12-month extension of the exemption for financial planners.
In that letter Bradbury says that the Government has agreed to the amendments “in light of concerns relating to the scope of a tax (financial) service” in the legislation.
He said that, because of this, the Government would:
- Extend the current exemption for financial advisers from TASA 2009 by 12 months to 30 June 2014;
- Delay the start date of the proposed amendments by 12 months to 1 July 2014 to give relevant entities more time to prepare for the regulatory regime;
- Delay all of the transitional arrangements in line with the delayed start date;
- Provide more clarity in the explanatory memorandum about the scope of the proposed definition of tax (financial) advice services and its interaction with the current Tax Agent Services Regime, particularly the definition of 'tax agent services’;
- Further clarify, to provide certainty, that the following types of advice will not be regulated by TASA 2009 because they are not 'tax agent services’:
- tax advice provided by a superannuation fund or pension fund pursuant to the issuance of a payment summary;
- services provided by a superannuation fund’s representatives pursuant to 'intra-fund advice’ provisions;
- advice provided by an insurer pursuant to payments of income protection or salary continuance insurance payments, and corresponding issue of payment summary and advice therein; and
- services provided by responsible entities of managed investment schemes to members of managed investment schemes.
- Commenting on the breakthrough, Senator Cormann said it should not have been so difficult to achieve.
“Their (the Government’s) handling of this has been typically chaotic, disjointed and ham-fisted,” he said. “A few weeks ago they wanted to ram these changes through without even a parliamentary inquiry.”
Financial Planning Association (FPA) chief executive Mark Rantall said the breakthrough was welcome but the devil would be in the detail.
“We will be working to ensure that what has been agreed is reflected in the ultimate outcome,” he said.
The legislation is now expected to pass both houses before Parliament rises at the end of next week.
