Boos and applause: How the industry reacted to Labor's budget

Among the budget reactions made on Tuesday evening, the Financial Planning Association of Australia (FPA) said it “welcomes” the Albanese government’s budget, especially its measures to improve access to housing.

“Home ownership is one of the cornerstones of retirement planning and one of the best lead indicators of a comfortable retirement. Measures such as the National Housing Accord, the Regional First Home Buyer Scheme, and steps to target homelessness and improve crisis housing, as well as reducing the age for people to make downsizer contributions to their superannuation, should support more security in retirement for Australians,” said FPA CEO Sarah Abood.

“We also welcome initiatives such as cheaper childcare and extensions to paid parental leave, changes to the PBS leading to more affordable medicine, and a commitment to increasing real wages, which will help alleviate the financial pressures felt by many Australian households,” Ms Abood continued.

In addition, she commended the government's commitment to an urgent review of the regulatory framework for managed investment schemes (MIS), calling it a “welcome development”.

Moreover, Ms Abood said that the FPA will continue to engage with the government in advance of the May 2023 federal budget on several issues, including broadening the base and managing the costs of its proposed Compensation Scheme of Last Resort (CSLR), extending the freeze on the ASIC levy for another year, and the broad tax deductibility of financial advice.

“We look forward to working with parties and stakeholders on policies and initiatives that contribute to affordable quality financial advice for all Australians and a sustainable financial planning profession for the future.”

FSC applauds Housing Accord

In its response, the CEO of the FSC, Blake Briggs, said the financial services industry “looks forward to the opportunity to take on the historical challenges that have prevented institutional capital from investing in affordable housing”.

“The FSC will work constructively with government to ensure that any capital deployed is consistent with the legal obligation on superannuation trustees to promote the best financial interests of members,” Mr Briggs said.

Moreover, the FSC welcomed additional funding to introduce climate reporting standards for large businesses and financial institutions.

“The government has responded to funds management industry calls for a mandatory, principles-based, climate reporting regime that will support investment in climate reduction and abatement, and we look forward to supporting the government with this initiative,” Mr Briggs said.

He noted that the FSC is “encouraged” to see the federal budget contain “no adverse changes” to superannuation taxation and contributions settings.

“Stability in the superannuation tax and contribution settings ensures consumers have the confidence they need to make financial plans for their future as they battle inflation and plan for an uncertain global outlook,” Mr Briggs said.

“Future budgets must continue to honour election commitments to provide stability and certainty in superannuation policy settings, and an enhanced focus on structural reform and economic growth to achieve Budget sustainability — not just increased taxes.”

CPA says “no North Star” in federal budget

Noting that the government has taken a “steady-as-she-goes approach” to the budget, CPA Australia said it is “yet to deliver a holistic plan to overcome the nation’s economic challenges”.

The accounting body’s senior manager of business policy, Gavan Ord, said, “overall, we give the budget a thumbs up,” but noted that it leaves open the question of “Where to next?”

What Mr Ord wants to see is that the government provide a “broader vision” about how the nation will navigate this “difficult economic territory”.

“Tonight’s budget was part one. There needs to be a long-term view of how to tackle major challenges in part two next year.”

Tax Institute says tax system “remains broken and unfair”

The Tax Institute was a lot more critical in its review of Tuesday’s budget, noting that while there are no winners, “our tax system remains broken and unfair”.

The Tax Institute’s general manager of tax policy and advocacy, Scott Treatt, said: “All Australians are losing, and will continue to lose until there is a commitment to a better, fairer tax and transfer system”.

Regarding the announced funding of government agencies, Mr Treatt said bodies like the ATO need their “base funding levels replenished and reinforced to provide a minimum level of service and support, particularly in the areas of law design, guidance, disputes and customer service”.

“These are the people who design our tax and transfer system — who decide matters of policy for superannuation, small businesses, income tax and more. They need the resources to properly review and improve tax policy so our system can be fair, equitable and sustainable. Positive change can’t happen when their hands are tied by poor funding,” Mr Treatt said.

To read an overview of the budget, click here.