Announcing the changes, Assistant Treasurer David Bradbury said the current exemption for financial advisers from TASA 2009 would be extended by 12 months to 30 June 2014. Following a second reading of the Bill debate was adjourned until tomorrow.
The extension was introduced despite a recent parliamentary joint committee enquiry recommending the Bill be reintroduced and passed with no extension and minimal changes.
The amended document also provided greater clarity over the definition of tax (financial) advice services.
Under the TASA changes, from 1 July 2014, financial advisers who provide tailored tax advice will be overseen by the Tax Practitioners Board to make sure they meet the relevant education, experience and other requirements.
Mr Bradbury said the Government will also provide further clarity that a range of financial services that provide factual information or ‘general’ tax advice are not part of the TASA regime.
This will involve further consultation with industry on whether there is a need to amend the TASA regulations to provide this clarity and ensure the regime operates as intended.
The Financial Planning Association (FPA), Association of Financial Advisers (AFA) and Financial Services Council (FSC) welcomed concessions to the Act, particularly the 12 month extension for financial planners to be brought into the regime, although accounting bodies expressed disappointment over the delay.
“The TASA extension is a win both for common sense and due process by the Financial Planning Association,” said FPA chief executive Mark Rantall.
“The FPA cited the Bill’s many outstanding unresolved issues and missing detail as good reason for its referral. The FPA community has consistently supported and called for a 12 month extension for the financial planning community to be brought into the TASA regime,” he said.
“This period will provide the financial planning profession with time to ensure businesses are appropriately equipped to come under this regime and ultimately, to deliver the best outcomes for consumers.”
The FPA said it will work with Treasury and the Tax Practitioners Board to ensure “sensible regulation” will be worked through to ensure consumer protection and a commercially viable outcome for the profession.
The AFA welcomed greater certainty on the matter for advisers and acknowledged the support of the coalition and the independents, as well as the Financial Services Council and the FPA in collectively lobbying on the issue.
“The delay in implementation is essential given the regulatory overload the industry is already dealing with,” AFA chief executive Brad Fox said. “It would have been an unfair and unreasonable expectation and an all but impossible rush for advisers to be ready for TASA by 1 July 2013.”
Mr Fox also welcomed greater clarity around the definition of tax (financial) advice services, its interaction with the current Tax Agent Services regime and the definition of 'tax agent services’.
“Getting the definitions right by way of regulation will give all interested parties an appropriate opportunity to make the legislation work in practice,” he said.
FSC chief executive John Brogden commended the government and opposition for negotiating a “sensible outcome”.
“The extension of the TASA commencement date by 12 months is the most sensible outcome for consumers and the industry”, he said.
In its current form, TASA has specified exclusions affecting the advice industry which will be dealt with under regulations and an explanatory memorandum, according to the FSC.
“This will allow the industry time to address the issues we have raised in our submission without the need for further legislation”, Mr Brogden said.
“The re-definition of tax (financial) advice under TASA is a positive outcome for the industry.
“We now have time to work with the industry to develop training and education programs for advisers to meet the TASA competency requirements and to make the necessary administration changes to comply with the new law.”
However Institute of Chartered Accountants Australia general manager of leadership and quality, Yasser El-Ansary, said the delay to the start date of the scheme was “disappointing”.
However the passing of the legislation remains the overriding objective to protect the public interest, he added.
