Tax-deductible advice ruled out

In an exclusive interview with ifa, the Assistant Treasurer said the amendments to the FOFA legislation are, in part, aimed at facilitating more “affordable financial advice” services for Australians to plan for “their future with certainty”.

However, asked whether the government would go a step further and make financial advice services tax-deductible, Senator Sinodinos said such an initiative is not a possibility in the current fiscal climate.

“I’m not contemplating tax-deductibility of financial advice,” Mr Sinodinos said. “You can often look at things in isolation and say, well, that sounds a good idea on its merits because there are social costs and benefits in doing it, or economic benefits in doing it, but the challenge for us in the period ahead is that we have to look at the Budget as a whole.

“When I and Joe Hockey and others sit down and look at the state of the Budget, our focus has to be over the next 12 to 18 months putting in place the measures to get the Budget back into surplus in a reasonable timeframe, and that does mean it’s very hard to commit to new measures.”

Channelling former Treasurer Peter Costello, Mr Sinodinos said the “best saving you’ll make is the spending you don’t undertake”, but continued that making amendments to the FOFA legislation – and “making sure the savings in the legislation get passed on to consumers” – will help the stated goal of growing the number of Australians in professional advice relationships.

The comments came ahead of a call from the Financial Planning Association – seconded by a number of ifa readers – to bring in tax-deductible advice fees in its submission to the federal Budget yesterday.