Govt concessions on tax adviser ethics bill fails to appease industry

The 10 professional associations representing tax advisers are still pushing for the disallowance motion to proceed on Tuesday despite concessions made by Minister for Financial Services Stephen Jones during a consultation on Friday.

A disallowance motion is set to be moved tomorrow by Coalition Senator Dean Smith following broad industry concerns expressed by professional bodies representing advisers such as Financial Advice Association about wide-ranging implications of poor drafting.

Professional bodies had told Jones that the determination as it was drafted would require mental health conditions to be disclosed as part of helping a client decide whether they wanted to engage a tax practitioner.

They also told Jones that the dob in a client rule in the determination needed more work to ensure that it was clear when advisers needed to report their client.

The use of a term such as ‘material’ is of concern to professional associations because of its vagueness.

A spokesperson for Jones said that there would be amendments made to the content of the determination – which was deemed necessary after the PwC tax leak scandal – after last Friday’s discussions.

“The meeting was constructive, and there was a collaborative goal to ensure the Code works as intended,” the spokesperson said.

“It was again reiterated that the obligations will not require the disclosure of mental health, religious views, or sexual orientation.”

The spokesperson said updates will be made to the code to ensure the obligations are made clear, together with other changes to the code to respond to industry concerns raised.

“In line with the minister’s commitment to industry bodies in a letter in late August, the government will release the draft amending instrument, updated explanatory statement, and the Tax Practitioners Board guidance package for public consultation as a matter of priority,” the spokesperson said.

The professional associations were still adamant that the disallowance motion should go ahead tomorrow despite the ground made up in discussion with the minister and Federal Treasury last Friday.

“The joint bodies made it clear today that the proposed amendments will still make our members’ work challenging, and further changes are required to make them clear, practical and fair,” the joint bodies said

“Sharing details about investigations and the mandatory requirement to ‘dob in’ a client need substantial reworking.

“[Jones’] office has committed to providing revised amendments, guidance and explanation to the joint bodies, following today’s meeting, and an additional round of public consultation.”

But the statement from the bodies says that the amendments discussed will not be finalised before the disallowance vote takes place tomorrow.

“Public consultation is no guarantee the amendments will be changed in a way that is best for our members, their clients and communities,” the statement said.

“Until the changes to the determination are agreed, the joint bodies remain supportive of the disallowance motion proceeding in the Senate on Tuesday.”

Shadow Minister for Financial Services Luke Howarth and Coalition Senator David Fawcett have conducted meetings with accountants in Adelaide to understand the impact of the determination on practitioners.

Howarth told Professional Planner that the government’s record on consultation on this determination was “abysmal”.

“Nine weeks after making this law, [Jones has] finally started consulting with a roundtable on Friday that he did not even attend,” Howarth said.

“After repeatedly telling tax practitioners their concerns were unfounded and the new regulation was ‘modest’, he has now repeatedly backflipped and admitted changes are required – with three embarrassing mea culpas and backdowns so far.

“It’s too little, too late and the Coalition is taking action in Parliament tomorrow to put a stop to this attack.”