An extension to the length of the inquiry into the operation of the Compensation Scheme of Last Resort (CSLR) and claims against Dixon Advisory has been criticised by the Financial Advice Association Australia (FAAA), given the recent blowout in the levy that will be charged to advisers.
FAAA general manager Philip Anderson stated his frustrations in a LinkedIn post that referenced the decision by the Senate to allow an inquiry conducted by its members to take an extra three months to report its findings.
“On Wednesday 5 February, the Senate approved a deferral of the deadline for the Senate Economics Committee Inquiry into Wealth Management Companies (CSLR and Dixon Advisory) from 27 March to 28 July,” Anderson said.
“In the context of the blowout in the cost of the scheme and the overwhelming evidence of deep flaws in the design and implementation of the CSLR, this delay is very frustrating.”
He said the FAAA was instrumental in calling the Dixon inquiry last September, with the reasons for it having grown exponentially since then.
“When faced with the news last week that not only will the scheme potentially cost the advice profession $70 million in 2025/26, but in fact much more in 2026/27, there is an absolute urgency for the government to take action,” he said.
“Deferring action on the grounds of a delay in the Senate inquiry or due to calling a new review is simply not an acceptable position to take.
“The advice profession needs and demands greater certainty on their exposure under the CSLR and it is essential that the government and the parliament listen to those calls and make commitments before the election.”
He also urged the Senate to halt the Division 296 tax bill’s progression through the parliament.
“We have two primary objections to this measure, including the taxation of unrealised capital gains and the lack of any indexation, so that over time it will impact many more Australians,” he said.
“We also object to the tendency of government to continuously tinker with the tax settings for super, which undermines confidence in the overall superannuation system.
“The progress of the bill that will impose the proposed Division 296 tax was scheduled to happen today (Thursday, 6 February), however, in some positive news, the debate is not on the order of business today and still some way down the notice paper.
“There are four sitting days next week, so it may happen next week. We will be watching carefully to see what happens with this bill in the Senate next week.”