Labor minister Bill Shorten has deferred the application for financial planners to register as tax agents until 1 July 2011, as part of a number of changes to Australia’s tax agent services regime.
The minister for superannuation and assistant treasurer announced the three-month extension and a number of other regime changes yesterday.
“As part of these new regulations we have also deferred the application of the national tax agent services regime until 1 July 2011 for the estimated 18,000 financial planners currently operating in Australia,” Shorten said.
“This extension allows extra time to consult about the upcoming options paper on the treatment of financial planners under the tax agent services regime.”
Industry associations have had mixed responses to Shorten’s changes.
The Institute of Chartered Accountants in Australia (ICAA) said the extension casts doubt over the original objectives of the legislation.
“Three months may not sound like a significant extension but we need to remember that by the time this issue is resolved, consumers will have waited more than two years for what we believe is a fairly straightforward policy decision,” ICAA tax counsel Yasser El-Ansary said.
FPA policy and government relations general manager Dante De Gori said the association has been in discussions with the minister about its concerns over the regime.
De Gori said at present there are two potential options for financial advisers. One is to register as a tax agent and the second is to resolve the issue through the current Australian financial services licensing agreement through the Corporations Act.
“So [it’s like] basically saying instead of giving financial services another regulator and another set of licensing requirements, can we not achieve an outcome via their current licensing requirements which is what our preferred position is? And that means ASIC will remain as the sole regulator,” De Gori said.
The Association of Financial Advisers chief executive Richard Klipin said the changes indicate the minister is genuine in his consultative approach with industry.
“Mr Shorten has barely had time to put his new job description on his business card and already he has demonstrated that he is a strong advocate for financial services, willing to listen to the industry’s concerns,” Klipin said.
The new regulations will clarify how “in-house” advisers and custodians are treated under the national tax agent services regime, Shorten said.
The tax agent services regime has replaced six state-based tax agents boards with a single standard national system.
The government expects to release the options paper for further consultation towards the end of this month, Shorten said.
The new national tax agent services regime came into effect on 1 March this year.
