In welcoming the passage of the Tax Laws Amendment (2013 Measures No. 3) Bill 2013 – introduced into parliament yesterday – Senator Cormann said the Coalition still harbours concerns about the practical implications of the legislation on industry.
“If we are successful at the next election, we intend to deal with those issues then – for example making sure the operation of this legislation is consistent with the requirements under the Best Interests Duty under the Future of Financial Advice changes and a range of other issues,” he told InvestorDaily.
He said the passage was a good outcome for industry, though management of the Bill and the parliamentary process leading to its passage has been “typically chaotic, disjointed and ham-fisted”.
“We supported the passage of this changed TASA Bill because the government has agreed to all our demands for change to their original Bill,” he said.
“That is despite their initial attempt to ram this legislation through the House of Representatives without even a parliamentary committee inquiry.
“A competent government would have seen the sense in our proposals straight away. But as they say, better late than never.”
The amendments to the Bill included a 12-month extension to the implementation date for financial advisers to 1 July 2014, and also provided greater clarity over the definition of tax (financial) advice services.
The amendments came despite a recent parliamentary joint committee enquiry recommending the Bill be reintroduced and passed with no extension and minimal changes.
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.
“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.
“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.”
AFA chief executive Brad Fox said the delay in implementation is essential given the regulatory overload the industry is already dealing with.
“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,” he said.
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’.
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.
“This will allow the industry time to address the issues we have raised in our submission, without the need for further legislation.”
