A Coalition attempt to scuttle a regulation that introduces eight new ethical obligations for tax advisers and agents in law has failed in the Senate following a tied vote.
A disallowance motion for the Tax Agent Services (Code of Professional Conduct) Determination 2024 was due to be moved in the Senate on Tuesday afternoon after 10 professional associations, including the Financial Advice Association, had ramped up lobbying to remove vagueness in the determination that rendered it unworkable in practice.
The bill was the Government’s response to misconduct from PwC and the firm’s tax policy confidentiality scandal, but would ultimately affect all tax agents, including relevant financial advisers.
Minister for Financial Services Stephen Jones and the professional bodies had a last-ditch meeting on Tuesday morning before the disallowance vote in order to thrash out the details of amendments that ended up with the government avoiding embarrassment on the floor of the Senate with Senator David Pocock voting with the government.
Pocock would have voted against the determination – giving the coalition a victory with a 32-30 vote for disallowance – had the government not negotiated with the professional associations to iron out the remaining differences between the bodies.
Labor Senator Anthony Chislom told the chamber before the tied vote that the government appreciated the further engagement with the professional associations.
“The government would like to thank the tax industry bodies for their constructive engagement with us on this matter,” Chisolm said.
“The government have committed to industry bodies to making further changes to the tax determination, on which we intend to publicly consult and which we intend to finalise by early October.
“This includes outlining the obligations within section 15 of the instrument of the Accounting Professional and Ethical Standards Board Code of Ethics. This voluntary code currently applies to only some tax agents. The change will expand it to all tax agents in a consistent way.”
Section 15 of the determination relates to the client dob in provisions that will now be based on a set of globally recognised ethical rules of the accounting profession.
Another provision of the regulation will be amended to ensure affected advisers have clarity that they are not required to provide personal health or mental health details to current or prospective clients.
The section of the regulation known as Section 45 was originally interpreted by the professional associations as requiring a broader batch of information such as disclosure of health matters to assist people in their decision related to engaging a tax adviser.
Chartered Accountants Australia and New Zealand said in a statement after the tied vote in the Senate that it welcomed the outcomes of negotiations with Jones.
“We support these changes, which address the concerns that we raised with the determination and commend [Minister Jones] for his willingness to make the changes to the code to ensure it will now be clear, practical and fair for the tax profession, as well as the millions of Australians that use their services,” CA ANZ said.
“We also thank the [Jones’] staff and Treasury representatives for listening to the tax profession’s concerns and acknowledging our constructive suggested changes were aligned with the intent of the government’s reforms.”
CPA Australia also issued a statement supporting the proposed amendments after two months of seeking a change of heart from Jones.
“Following weeks of consultation that resulted in last Friday’s roundtable with [Minister Jones] and Treasury, the joint bodies received changes to the proposed determination that incorporated many of the constructive changes that we proposed,” CPA Australia said.
Shadow Minister for Financial Services Luke Howarth said in a statement to Professional Planner the government had waited nine weeks after making the law to engage in proper consultation with the affected professional associations.
He said that the coalition would seek to remove the regulation if it was to win government at the next federal election.
A media statement on behalf of Howarth and Coalition Senator Dean Smith said the last-minute concessions were “another deal with the Greens that has blown up in the Government’s face”.
“The Albanese Labor Government has teamed up with the Greens and Senator David Pocock to block the Coalition’s attempt to throw out onerous new regulations for local accountants, bookkeepers and tax agents,” the statement said.
“It remains to be seen whether [Minister Jones] will deliver on these piecemeal changes or backflip yet again.”
