Accounting, advice groups resistant to Jones’ ‘unilateral’ decision

Treasury has again run into trouble on its regulatory drafting and consultation processes – this time over the Code of Conduct to be applied to tax practitioners including financial advisers.

The joint accounting and advice bodies have made clear they are unhappy with the Tax Agent Services (Code of Professional Conduct) Determination 2024 and the fact that it was signed off by the Assistant Treasurer and Minister for Financial Services, Stephen Jones.

The joint bodies include the major accounting groups plus the Financial Advice Association of Australia (FAAA), the SMSF Association and the Tax Institute.

The joint bodies have written directly to Jones expressing their “strong concerns about the construct and implications” of the new Legislative Instrument (LI). What is more they have asked that he withdraw the instrument to allow further consultation.

In doing so, their letter to the minister reinforces their concerns about him having the power to act on the Code outside of Parliamentary oversight.

“The Joint Bodies welcome more robust and effective regulation of the tax system and the tax profession. However, rules that create inconsistencies and uncertainties work against compliance and good governance,” their letter said.

“In practice, tax practitioners, many of them in small businesses, will find it difficult to comply with certain aspects of the LI in its current form.”

“From the outset, the Joint Bodies have consistently expressed concerns about the Minister being able to unilaterally alter Code obligations, as it avoids more robust scrutiny from Parliament,” the letter said. “We request the Minister withdraw the LI as registered and conduct further targeted consultation to ensure an equitable outcome that allows effective compliance with and better oversight of the LI.”

The particular concerns raised by the Joint bodies include an obligation to keep current and prospective clients informed of ‘any’ matter that could significantly influence a decision of a client to engage them and a retrospectivity obligation to consider matters as far back as 1 July, 2022.

The letter goes on to say that the final LI “contains previously unseen obligations together with significant additional implications of the provisions that were amended following the public consultation and which have not been subject to public consultation”.

“Overall, we continue to hold significant concerns about the LI and the detrimental aspects that outweigh the improvements made to address our concerns.”