It has now been just over two years since the Accountants’ Exemption was lifted and empirical evidence suggests that accountants are having to deal with increased costs and an onerous compliance regime where these cost hikes are being passed on to their clients.
The Accountants’ Exemption allowing the provision of limited advice by recognised accountants dealing with self-managed super funds (SMSFs) was originally introduced as a part of the Government’s future of financial advice (FOFA) reform which came into effect from 1 July 2012. At the time this was seen to be a common-sense approach to the issue.
Tax & Super Australia estimates that the accountants’ average cost of providing advice to their clients is currently around $2,000. “Left unchecked, this will only lead to further increases in costs to the ever growing 600,000 SMSFs in Australia, currently costing SMSF trustees, self-funded retirees and many small business operators over $1.2 billion in additional fees that are unjustified and unsustainable”, said Mr Moti Kshirsagar, CEO of Tax & Super Australia.
The new AFSL licensing arrangement which came into effect from 1 July 2016 has caught in its net numerous small accounting practices that participate in merely the setting up and the administration of SMSFs. Accountants who are perfectly qualified to undertake these functions are withdrawing their services due to excessive compliance costs and highly cumbersome regulatory processes. Tax & Super Australia is gravely concerned that this phenomenon could result in substantially reduced competition exacerbated by increased costs and fewer services.
In a submission to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Tax & Super Australia has called on the Royal Commission for the reinstatement of the Accountants’ Exemption, to right the wrong that had been caused by Government changes that came into effect from 1 July 2016 as they apply to accountants.
“We’ve reached the point where regulation is hurting the people it aims to protect. In an attempt to target a minority of wrong doers, the Government had got it wrong by imposing significantly higher cost burden on SMSFs and self-funded retirees by overlooking the financial goals, retirement savings and financial well-being of ordinary Australians” said Moti Kshirsagar.
Moti Kshirsagar has called upon other accounting bodies to stand-up for their members and support Tax & Super Australia on this critical issue impacting the accounting fraternity.
“Tax & Super Australia’s vision is for a fair, efficient and cost-effective compliance system for all Australians” said Moti Kshirsagar.
Tax & Super Australia’s submission to the Royal Commission can be found on Tax & Super Australia’s website
Media contact details:
Mr Moti Kshirsagar,
CEO, Tax & Super Australia
(03) 8851 4555 | firstname.lastname@example.org
Taxpayers Australia Ltd trading as Tax & Super Australia is a not-for-profit organisation that has assisted accountants, tax and superannuation professionals for nearly a century. It was established in 1919 to help promote a simpler and fairer tax system for all Australians. With a subscriber base of approximately 12,000 including 4,500 members, the organisation has evolved to meet the challenges of Australia’s modern tax regime and remain at the forefront of supporting accounting professionals.