The stockbroking industry should not be a target of the Government’s proposal to seek cost recovery for the Australian Securities and Investments Commission (ASIC) as most of the complaints to the Financial Ombudsman Services’ (FOS) have been against financial planners.
That is the view of the Stockbrokers Association of Australia, which said the cost recovery proposal will “trigger a race to the bottom”, and called for the proposal to be dumped.
Stockbrokers Association chief executive, Andrew Green, said brokers who do not pass on the costs to clients will be disadvantaged compared to those who do, while the mid-sized firms that try to absorb the costs will struggle to stay afloat and be absorbed by the big firms.
“It’s disingenuous for the Government to attempt to pass off their proposal as a virtuous cost recovery initiative. The truth is that it is a ‘great big new tax’ on the stockbroking industry,” Green said.
“The stockbrokers of Australia have contributed to the National Guarantee Fund (NGF) and the balance is now more than $100 million. What other industry has been so prudent?
“And in the last 30 years, there have only been difficulties in two firms,” he said.
He also said the levy on market participants is disproportionate.
The objective of the indirect taxes seems to be to pass it on to the consumer, which will affect their superannuation and investment balances, especially retirees, Green said.
“Instead of helping the economy transition from a resources economy to a vibrant, export-driven services economy, this “great big new tax” will make the stockbroking industry even more uncompetitive against its low cost competitors such as New Zealand and Singapore.”
