In a blow for the Financial Planning Association (FPA), the Assistant Treasurer Arthur Sinodinos has made it clear that his Government has ruled out government-funded incentives for access to financial advice.
Assistant Treasurer Arthur Sinodinos’ comments came in response to a recent submission by the FPA requesting the government to implement tax deductibility on financial planning fees. The FPA said that, “the inability to claim a tax deduction for the fees associated with an initial financial plan acts as a disincentive for people to take the first step towards organising their finances on a strategic basis.”
Under the submissions, The FPA recommended that the Government prepare an initial financial plan and wanted ongoing management fees and annual retainer fees to be tax deductible. The association also pleased for alternative payment methods to improve access to advice such as accessing super, the use of salary sacrifice arrangements and the government superannuation co-contribution scheme.
Sinodinos has commented that the amendments to the FOFA legislation were aimed at facilitating more affordable financial advice services for Australians to plan for their future with certainty and was decisive in his decision that “making the financial advice services tax-deductible, was an initiative that was not a possibility in the current fiscal climate.”
Although the Assistant Treasurer conceded that tax-deductibility of financial advice may have merits and benefits for the economy, he confirmed that his priority over the next 12 to 18 months was, “getting the Budget back into surplus in a reasonable timeframe.”