Government ignores FAAA’s budget wish list, Abood ‘disappointed’

The government has ignored the Financial Advice Association Australia (FAAA)’s budget wish list, which called for a fix to the problems with the Compensation Scheme of Last Resort (CSLR), the Australian Securities and Investments Commission (ASIC) funding levy, the financial advice exam cost and Australian Taxation Office (ATO) portal access, among others.

FAAA chief executive officer Sarah Abood expressed disappointment that while financial advisers continue to struggle with significant cost increases, like many small business operators, calls to the government have been disregarded.

“Minister Stephen Jones has acknowledged the importance of financial advice but there is little remedy for the skyrocketing costs that advisers have been and will continue to pay. Much of these costs will inevitably be passed on to consumers, further raising the cost of professional financial advice that more Australians need more than ever,” Abood said.

“While there are some positives here for advisers running small businesses, in the extension of the instant asset write-off scheme for a further year, along with energy rebates, we continue to urge the government to consider the six ideas we have put forward. These will have a direct practical impact on reducing the cost to consumers of professional financial advice.”

The FAAA did, however, acknowledge that updates to social security deeming rates and aged care funding arrangements, along with previously announced tax cuts and new energy rebates, provided some much-needed good news to consumers of financial advice.

Large packages for AML/CTF adherence ($168 million) and the rollout of Digital ID ($288 million) should have a positive impact on the work that financial advisers do.

“It is good to see the government committing to these reforms and we look forward to working closely with the government on both,” said Abood.

"We will have more to say about the federal budget over the coming days and encourage members to register for the FAAA member webinar on Thursday.”

On Monday, the FAAA pushed for a fairer ASIC funding levy, managed costs for the CSLR, improved tax deductibility for financial advice, access to the ATO portal for financial advisers, increased support for adviser education, relief in exam fees, and a reversal of proposed changes to reduced input tax credits for advice fees.

“The FAAA remains very concerned about the fast-increasing cost of the ASIC levy. The financial advice subsector was charged in total $47.6 million last financial year – more than any other sector including super funds, listed companies, and life insurers,” Abood said at the time.

“The per-adviser amount almost tripled, to $2,818 per adviser in the last year. These rapidly increasing costs are a factor in the increasing cost of financial advice to consumers,” she added, stressing again the “unfairness” of a model that penalises compliant advisers for the actions of the non-compliant few.