Parliament returns this week for the second session of sittings for 2017. While politicians have been settling back into their electorates over the past few weeks, government departments have been busy with consultations.
The government spent most of the Parliamentary sittings at the end of last year and the beginning of this year putting the finishing touches to its 2016-17 budget measures. Part of this process has included trying to find a workable solution to implementing the infamous “2014 budget zombie measures”.
As a reminder, these primarily dealt with moderating social security benefits, particularly for people on non-age or disability-related payments.
In a move similar to last year’s “omnibus” bill that introduced spending cuts, the government has now packaged the new social security measures into a single bill in an effort to pass them through the Senate seamlessly.
At this point, it appears the ALP and Greens will block portions of this package. Whether the government can convince a sufficient number of minor party members to vote the package through remains to be seen. We also expect to see the Senate consider the Objectives of Super Bill, given the completion of the legislative body’s recent review, which recommended no changes to the proposed objective.
The government is likely to start preparations for its narrative around the 2017-18 budget this week. The issue of housing affordability will be discussed, and amendments to both negative gearing and access to super for first home-buyers have already been raised to gauge public support. Energy security is also likely to be a major feature of the upcoming budget.
Of major interest to financial planners, the board of directors for the new standards-setting body will be announced shortly by the Minister for Revenue and Financial Services, Kelly O’Dwyer. The new body will implement the standards for all advice providers and be deeply involved in setting the curriculum and process for both new and existing advice providers. The board will be required to have expertise in areas such as how to determine degree equivalence status, the exam, continuing professional development policy, the code of ethics and the professional year framework for new advice providers.
We are also getting close to the final Ramsey report on external dispute resolution, which we expect the minister to announce in the coming weeks. The life insurance regulations have now been registered, and the release of the Australian Securities and Investments Commission’s legislative instrument will follow shortly, so that the implementation of the life insurance reforms can be finalised.
A number of Parliamentary inquiries will report their findings in the weeks ahead as well, including the Parliamentary Joint Committee on Corporations and Financial Services report on the life insurance industry following recent public hearings, and the Senate Economics Committee report on consumer protections and non-payment of super guarantee.
Regulators hard at work, too
Recent weeks have been busy for regulators, too. The Australian Taxation Office has been releasing guidance on the 2016 budget’s super changes. These law companion guides are particularly useful for more technical questions around the transfer balance cap, measurement of defined benefit schemes for the concessional contributions cap, and the new concessional contribution carry forward rules.
The Tax Practitioners Board has been running a series of information sessions and webinars for tax (financial) advisers to understand their re-registration requirements. As a reminder, only registered tax (financial) advisers are able to provide advice and charge a fee. Therefore, it is important to make sure you understand whether you need to register or be covered by a registered supervision model before the end of the financial year, especially if you still need to meet the education requirements. If you do need to meet the education requirements, the transitional registration option may still be available for you in certain circumstances and gives you three more years to complete courses.
Finally, both the Australian Transaction Reports and Analysis Centre (AUSTRAC) and ASIC have recently released reports following investigations. AUSTRAC’s findings on reportable entities’ compliance with reporting of suspicious matters have a number of important lessons for financial planners and their practices, in the areas of anti-money laundering and counter-terrorism actions.
Meanwhile, ASIC’s report on the mortgage broking industry contains useful recommendations on remuneration, conflicts of interest, and disclosure of relationships. And Friday brought the release of Report 515, on how large licensees deal with instances of poor advice. The file review suggestions are particularly useful in understanding how ASIC reviews files when it investigates planners. The regulator’s new funding model and regulatory powers around product design will also soon progress to legislation stage, which will have an impact on planning businesses.
So, while the last sitting provided us with much more certainty on standards and life insurance, the current sitting period will include much legislation in the pipeline that will potentially affect financial planners and their businesses in the coming years.
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TOPICS: asic, AUSTRAC, federal budget, Kelly O'Dwyer, legislation, life insurance, Minister for Revenue and Financial Services, mortgage broking, parliament, regulation, senate