Speaking at a parliamentary joint committee (PJC) on corporations and financial services hearing on the proposed amendments to TASA in Sydney yesterday, Mr Cormann said he was concerned about the disagreements between representative bodies of various financial services stakeholders over TASA.
“What disturbs me is that there seems to be a turf war between the accountants on one side and the financial planners on the other,” he said during the evidence given by the Tax Institute of Australia.
The shadow minister levelled particular blame at the accounting bodies, who he said will not be as affected by the changes as financial planners and are only interested in lobbying on the issue of TASA due to “interests in the market”.
“Why would the parliament err on the side of vested interests?” Mr Cormann asked senior tax counsel Robert Jeremenko. “It is easy for you to say you are quite comfortable and happy for these other groups to be exposed to regulation.”
Earlier, following joint evidence presented by CPA Australia and the Institute of Chartered Accountants (ICAA) Senator Cormann said he “could not believe what [he] just heard”, referring to comments by ICAA general manager leadership and quality Yasser El-Ansary that it was unreasonable of the financial planning industry to expect “absolute certainty”.
“I have an old-fashioned view – you should go into regulatory change knowing what the problem is and how you are going to go about it,” the Senator added.
The evidence presented by the accounting bodies followed formal submissions from the Financial Planning Association (FPA), Association of Financial Advisers (AFA) and Financial Services Council (FSC).
The three industry bodies were unanimous that they do not oppose the legislation in theory but that a number of amendments need to be passed – as well as updated guidance from the corporate regulator – or else an extension will be necessary for the industry to be able to comply with the TASA regime.
The FSC proposed 17 amendments in its submission to the PJC, including the need for greater definitions of tax agents and the need to consider any potential conflicts with the Future of Financial Advice reforms.
“We have 18 days to go before we find ourselves in the Future of Financial Advice (FOFA) regime and are currently in the last month of the third of three one year exemptions for TASA,” sad FSC chief executive John Brogden.
“With FOFA and Stronger Super both commencing on 1 July, financial services companies are 110 per cent focused on compliance.”
The FPA also called for an extension in the absence of passed amendments, and said there is little evidence - for example disputes before the Financial Ombudsman Service - to suggest there is a problem with the tax advice currently being given to consumers by financial planners.
