Last week The Tax Institute presented evidence to the Parliamentary Joint Committee on Corporations and Financial Services during its inquiry into proposed legislative changes to bring financial advisers into the Tax Agent Services Regime.
This continues our extensive advocacy on this issue to ensure that these long sought after consumer protection measures are applied to financial advisers who operate in tax.
An extract from our evidence to the Committee follows:
“Mr Jeremenko : Tax is an inherently complex discipline. I think many of us would be aware of that. His Honour Justice Patrick Keane when he was Chief Justice of the Federal Court—he is now a High Court Justice—described the tax act as 'like opening the door to a parallel universe.' In the context of the legislation before as today, it is very important to realise that what we are talking about is ensuring that those people who are trying to navigate through that parallel universe have the appropriate professional and ethical standards and the appropriate educational qualifications and experience to make that journey safely. That is also important for those who are relying on those people doing the navigation—that is, in this context, the people receiving the tax advice.
“In summary, it is extremely important in The Tax Institute's view that the consumer protection measures before us today—which is what they are about, they are measures that are aimed squarely at people receiving tax advice from their financial planner—are passed into law before 1 July 2013.
“CHAIR: Could I ask you to put a view on the question of: what is the problem that requires this legislation? It has been disputed—it has been said that there is not a problem and that there is going to be an unnecessarily high financial burden on the industry to comply. What is the problem that is being addressed by this legislation, that you say is urgent and should be brought before the parliament, passed and the implementation of which should be commenced by 1 July 2013?
“Mr Jeremenko : The problem is that any consumer, anyone from the general public, who speaks to a financial planner and receives advice of any nature regarding tax—the complex parallel universe of tax—has no protection should this legislation not pass, and has no protection should that advice be incorrect. So this legislation makes sure that the Tax Agent Services Act applies to that advice. What that means is that the extensive code of conduct within the legislation and the extensive disciplinary procedures of the Tax Practitioners Board, which is the agency charged with administering the Tax Agent Services Act, can apply to anyone who gives tax advice incorrectly and does not do that in a fit and proper way. That is the reason for the legislation needing to be implemented. I question the need for another 12-month delay. As I said, there have been three 12-month delays for the purposes of getting further detail and further consultation, and that consultation has occurred.”
The Committee will report on Monday 17 June and the Government is committed to reintroducing the measures into Parliament as a priority.
I would be happy to discuss in more detail the nature of the Committee hearing and our appearance before it; please be in touch via Tax Policy.
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.