Shadow financial services minister Luke Howarth has confirmed the Liberal Party’s commitment to the SMSF sector and the advice industry should it form government after Saturday’s federal election in a letter to Institute of Financial Professionals Australia (IFPA) chair Stephen Ware on issues such as the proposed Division 296 tax and the Compensation Scheme of Last Resort (CSLR).
In the correspondence, Howarth again stated a coalition government will reject Labor’s Division 296 tax – a measure he noted as an unindexed tax on unrealised capital gains in super.
He also vowed to significantly change the current framework of the CSLR to make the measure sustainable and less of a burden on the financial advice industry.
“I am deeply concerned by how the CSLR is driving up costs for advisers. On Labor’s watch the scheme has become an unfair disaster, with it recently revealed that you are set to be slugged with record CSLR levies this year and the levy estimate for FY26 is projected to exceed $77 million,” he said.
“The CSLR has become a scheme which is guaranteeing investment performance rather than acting as a ‘last resort’. Eighty per cent of CSLR claims are ‘but for’ compensation for the hypothetical gains.”
Specifically, he vowed a coalition government would reinstate the $10 million annual subsector cap, reducing it from the current level of $20 million, exclude the ‘but for’ compensation component for hypothetical capital gains and scrap any ‘special’ levies for this year.
“This urgent action to ease the immediate burden would be followed by work to make the scheme more sustainable. This work would prioritise removing situations like Dixon Advisory, where vertically integrated advice businesses shed their liabilities to the CSLR, reducing the excessive administration costs of the scheme, which currently make up around a third of the levy advisers pay, and considering the outcomes of Treasury’s review,” he pointed out.
According to Howarth, a Peter Dutton-led government would also aim to return to having 30,000 practitioners in the financial advice industry, including making it easier for accountants to provide these types of services.
Further, he said a coalition government would implement additional recommendations from the Quality of Advice Review in its first 100 days, including reforming statements of advice to reduce operational costs. Remodelling education and relevant degree standards were also recognised as priorities should May 3 return a favourable result.
“A Dutton government will make your members a priority and get the regulatory costs and levies they are being slugged with back under control,” Howarth noted.
