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Before LRBA ban, stop poor quality advice - IPA

 

THE Financial System Inquiry (FSI) proposal to reinstate the banning of limited resource borrowing arrangements (LRBA) within an SMSF should be reviewed in favour of more targeted measures to address inappropriate use of gearing linked to poor quality advice, according to the Institute of Public Accountants (IPA).

“The IPA believes that the issue is not SMSF borrowing per se, but inappropriate advice provided by unlicensed advisers,” said IPA chief executive officer, Andrew Conway.

“A sledgehammer approach may not be the appropriate way to eliminate the use of poor quality advice relating to SMSF gearing.

“We need better analysis of ways to address the risks surrounding borrowing before merely imposing an outright ban.

“No case has been made, including no evidence presented, that there is a risk to the superannuation system as posed in the final FSI report.

“Interestingly, there are also no alternative measures other than an outright ban to mitigate some of the concerns raised.  For example, if they are worried about the diversification, why not consider excluding LRBAs for funds with small balances.

“There is plenty of scope to amend the rules to specifically address all of the issues raised without resorting to a total ban,” said Mr Conway.

The IPA has made this recommendation as part of its 2015/16 pre-Budget submission.  Further detail can be found at www.publicaccountants.org.au/2015budget

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Tracking progress on reinvention of the Australian Tax Office

THE Inspector-General of Taxation and several key stakeholders will participate in a wide-ranging discussion on current tax issues this Wednesday.

As part of the House Tax Committee’s inquiry into the Australian Taxation Office (ATO) 2014 Annual Report, senior officials from the ATO will give evidence on a range of issues, including:

• the risk framework used to select taxpayers for audits;
• the introduction of single touch payroll from July 2016;
• the ATO’s survey on taxpayer perceptions of ATO fairness; and
• delays in issuing refunds to taxpayers.

Committee Chair, Bert van Manen MP, said the hearing would allow the committee to track progress with the Commissioner’s plan to reinvent the ATO as a more contemporary and client-focused organisation.

“In past hearings, the ATO has been responsive in dealing with issues raised by stakeholders and the committee. We look forward to working through new issues at this hearing and being part of continuous improvement at the ATO,” he said.

Public hearing
Wednesday, 18 March 2014
Committee Room 2R1
Parliament House, Canberra

4pm   ATO
           Inspector-General of Taxation
           Chartered Accountants Australia + New Zealand
           Council of Small Business of Australia
6pm   Adjournment

The hearing will be broadcast live at: www.aph.gov.au/live

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Review of the Australian Prudential Regulation Authority Annual Report 2014 (First Report)

The House Economics Committee has today tabled its first report on the Review of the Australian Prudential Regulation Authority (APRA) Annual Report 2014. 

The Chair of the committee, Mr John Alexander OAM MP, said that this review continues the committee’s important examination of Australia’s prudential standards for the banking, insurance and superannuation sectors.

APRA informed the committee at the public hearing in November 2014 that the Australian financial sector is broadly in good health and that authorised deposit-taking institutions (ADIs) remain profitable.

APRA has also stated that it has boosted its scrutiny of ADI lending standards as a response to increased residential property lending. This is welcomed by the committee which will continue to monitor this activity with interest.

APRA informed the committee it has been overseeing the progressive implementation of the new prudential standards through the Stronger Super reforms and takes the view that reasonable progress had been made.

APRA has also stated its particular focus on reviewing governance and risk management frameworks and practices in this industry and improving disclosures regarding investment risks for superannuation fund members.

The committee regards these activities as appropriate but as yet unfinished. Mr Alexander stated, "Although we are encouraged by APRA’s comments around the need for better governance and accountability in the Super Industry, we will still have to wait and see how successful its approach will be."

The recent recommendations of the Financial System Inquiry (FSI) have the potential to directly impact on APRA’s activities in the period ahead. Mr Alexander commented that the committee looks forward to discussing these suggested reforms with APRA at future hearings.

The next APRA hearing will be held this coming Friday 20 March 2015 in Canberra. The report is available on the committee’s website at: http://www.aph.gov.au/Parliamentary_Business/Committees/House/Economics/completed_inquiries

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VEIC welcomes review of visitor economy to grow Victoria’s events

THE Victoria Events Industry Council (VEIC) has welcomed the Andrews Government’s announced Victorian Visitor Economy Review for the benefit it will bring to the events industry.

“Victoria’s celebrated business, sporting and cultural events are an important part of our state’s $19 billion tourism sector and it is positive that the spotlight is on opportunities to further capitalise on this growth industry,” said VEIC Chief Executive Dianne Smith.

“Victorian businesses throughout our state are keen to collaborate further on events with government and we are confident that this review will highlight innovative opportunities for this.”

Ms Smith’s comments follow the Andrews Government’s announced Victorian Visitor Economy Review, which will study events in Australian and international cities, along with a review of Victoria’s relevant government bodies, to ensure Victoria retains its status as the events capital of Australia.

“Business and government absolutely need to continually work hard to make sure we get the greatest return possible from this thriving and important industry,” said VEIC Chair Peter Jones.

“It is a competitive market and many events, such as this week’s Formula 1 Australian Grand Prix, are highly sought after by competing destinations.”

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The Victoria Events Industry Council (VEIC) is the peak body for Victoria’s events industry, providing one united industry voice. Major Events contribute over $1 billion to Victoria’s economy every year, creating jobs and underpinning Melbourne’s status as one of the global sporting capitals and the World’s Most Liveable City.


vtic.com.au

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