Aus government smothers new business, hindering success

After moving to Sri Lanka in 2019, Prad Navaratnam – founder and managing director of paraplanning service Advice Lab – discussed some of the areas of concern he had in regard to the government working with the financial services sector during a recent appearance on the ifa Show podcast.

“I find Australian government regulation… they dip their toes in way too much,” Mr Navaratnam said.

“There’s so much red tape just to get anything off the ground there. By the time you get through all the regulation, pay all the commissions, pay all the fees, pay all the insurances, you haven’t even opened your doors yet and you’re a good two years behind.

“I understand they’re trying to protect consumers at the end of the day, but if you’re trying to encourage people to get into business and you want people to get out there and create more businesses and help generate more profits – which will in turn pay more taxes which is great for the country – you need to let them do that. You can’t police them as much as Australia [does].”

Mr Navaratnam said in comparison, the Sri Lankan government wants entrepreneurs to start businesses.

“They’ll give you whatever support that they can to get you off the ground to help you get up and going,” he said.

“That’s the sort of mindset [Australia] needs. Not a mindset of, ‘No, sorry. You can’t start until you’ve got these documents in place.’”

Listen to the full podcast here.

Mr Navartanam’s comments come as Treasurer Josh Frydenberg announced on Monday that the cost of levies charged by ASIC will be reduced.

The current relief will see ASIC levies charged per licensee remain at $1,500 – a substantial reduction relative to the level estimated in ASIC’s 2020-21 Cost Recovery Implementation Statement of $3,138 per adviser.

This would ultimately see ASIC levies charged for personal advice to retail clients restored to their 2018-19 level of $1,142 per adviser for the next two years (relating to 2020-21 and 2021-22).

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.