Industry bodies have expressed their disappointment with the 2024 federal budget noting the government has overlooked key areas of need it had raised with Treasury prior to its release.
The Financial Advice Association Australia (FAAA) specifically identified a review of the funding arrangements for the compensation scheme of last resort (CSLR), a fairer Australian Securities and Investments Commission (ASIC) funding levy, and the tax deductibility of financial adviser fees as among the issues it would have liked to have seen addressed by Treasury in handing down the budget.
“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,” FAAA chief executive Sarah Abood noted.
“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.
“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,” she said
To that end, Treasury made reference to the closure of Dixon Advisory in the budget papers, acknowledging it couldn’t estimate the value of compensation claims stemming from its failure which the financial advice sector will eventually be forced to fund.
“The value of the Australian government’s liabilities under the CSLR is unquantifiable. The collapse of Dixon Advisory and Superannuation Services Pty Ltd substantially increased the backlog of potential eligible claims,” it stated.
SMSF Association chief executive Peter Burgess also raised concerns about the fairness of the burden and voiced his disappointment it was not addressed.
“It was probably wishful thinking but we would have liked to have seen an announcement in the budget that the government would agree to pay a greater share of the Dixon Advisory compensation claims,” Burgess said
“We think it’s totally unfair that the advice industry is being asked to pay such a substantial amount and we would like the government to show some support for the financial planning industry and pick up a greater share of those costs.”