FIVE of Australia’s largest financial advice industry associations have condemned an increase in financial adviser licence fees as “shameful” and called for an immediate review of the ASIC industry funding model.

Chartered Accountants Australia and New Zealand, CPA Australia, Financial Planning Association of Australia, Institute of Public Accountants and SMSF Association say the steep increase highlights serious issues with the funding model and will hasten the exodus of advisers from the industry.

The fee hike, published by ASIC yesterday, represents an increase of 160 percent over two years for financial advisers. Meanwhile, the number of financial advisers has fallen from around 25,200 in 2017-18 to about 21,200 now.

The total cost levied by ASIC is now $1,500 per retail advice licence, plus an additional $2,426 per authorised adviser under the licence. This means a sole practitioner holding a limited licence can expect to be hit with a $3,926 bill from ASIC within weeks.

The organisations' top five concerns are:

1. The model doesn’t account for changing industry dynamics.
2. The model is contributing to the decline in financial adviser numbers.
3. Remaining participants are left to shoulder a disproportionate cost burden.
4. ASIC’s preliminary cost estimates are often inaccurate and hence difficult to budget for.
5. Penalties and fines are diverted to consolidated revenue rather than off-setting ASIC’s costs.

The group noted that the industry funding model has not changed despite major shifts in the financial advice sector. For example, banks have largely ceased operating financial advice businesses. Yet ASIC’s budget to oversee financial advisers has increased from $25.6 million in 2017-18 to more than $56 million in 2019-20. This is largely due to supervision and remediation of historic deficiencies in the banks.

Declining adviser numbers mean that remaining participants must shoulder a heavier proportion of the total cost. This is impacting the viability of remaining businesses. Ultimately, this has flow on-effects for competition and the accessibility and affordability of financial advice.

a spokesperson said ASIC provides an estimate for each year’s industry levy about six months before the final amounts are invoiced.

"Experience has shown that these are often inaccurate," the spokesperson said. "This makes it difficult for financial advice businesses to budget for their operating costs.

"Fines and penalties go into consolidated revenue. Retaining these would help off-set ASIC’s operating costs and put a stop to the existing cycle of levy increases."

The group is calling for the following action in response to the fee increase:

1. The government should immediately review the industry funding model.
2. The government should reduce or remove the latest industry funding levy increase.
3. ASIC should be properly funded from consolidated revenue to undertake its functions.
4. ASIC’s industry funding levy must reflect the cost of regulation and not fund other budgetary measures.

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THE Federal Government’s plan to boost processing of critical minerals needed for batteries, solar panels and wind turbines is a welcome step that can potentially strengthen our economy while tackling climate change, according to the Climate Council.

The 10-year Resources Technology and Critical Minerals Processing Roadmap, announced by Prime Minister Scott Morrison today, makes funding available to improve Australia’s resource processing and manufacturing expertise. 

“Boosting our processing capability of rare earth and other critical minerals can add value to our economy and support growth in our manufacturing sector,” Climate Council spokesperson and economist, Nicki Hutley said.

“Processing minerals domestically could give Australian manufacturers a major competitive advantage in manufacturing renewable energy technologies, batteries, and electric vehicle parts,” Ms Hutley said. 

“It could also drive much-needed jobs transition in mining regions like the Hunter Valley in NSW, Central Queensland and Western Australia. These areas already have the natural resources and significant skills and infrastructure, but will need additional investment.

“To help manufacturers be low-carbon as well as competitive, governments must increase the supply of affordable renewable energy to power new minerals processing operations.

“Ultimately, this roadmap is a promising step towards a self-reliant minerals manufacturing sector, the development of technologies that tackle climate change, and a prime position in the global minerals market,” Ms Hutley said.

“But the government’s support for a gas-led recovery instead of a plan to power Australia with clean, affordable renewable energy is a roadblock to its success."

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MUSWELLBROOK Shire Council should "reverse its bizarre opposition to an extension of Mangoola mine and back the hundreds of local jobs it will sustain"the Mining Union said today. 

CFMEU Northern Mining and NSW Energy vice president Jeff Drayton said coal miners had traditionally been able to rely on local government representatives to support their jobs because of mining’s contribution to the region.  

“Muswellbrook Council’s opposition to the mine was surprising and seems to be based on spurious grounds,” Mr Drayton said. 

“All mining proposals should of course meet the high environmental and regulatory standards required in NSW. Glencore’s proposal for Mangoola does this, while also creating jobs and delivering millions for the local and state economy.” 

The Mangoola Coal Continued Operations Project, which is currently being considered by the Independent Planning Commission of NSW (IPCN), would extend the mine’s operation until 2030. The mine would otherwise cease production in early 2025. 

The project would sustain 400 existing coal mining jobs, which would grow to 480 over the course of the project; create an additional 145 construction jobs; and provide a $92.6million net benefit to the Upper Hunter over the course of the project. 

Mangoola Mine has a highest proportion of local workers of any in the area, the union said, with 88 percent living in the Muswellbrook, Upper Hunter and Singleton Local Government Areas. 

The Mangoola extension should be considered on its merits and not on ideological grounds, Mr Drayton said. 

“I encourage all Muswellbrook Shire Councillors to reconsider council’s position and back local jobs,” he said. 

“And I urge Muswellbrook community members to make a submission to the IPCN showing their support for the jobs and economic activity the Mangoola extension will create.”

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TAFE NSW workers are rallying in Newcastle over the loss of 678 frontline jobs and the sale of the Scone campus.

"The sale of the Scone TAFE is the latest in the Berejiklian Government's fire sale of state assets which will leave regional NSW worse off," CPSU NSW general secretary Stewart Little said.

"The sale of the Scone campus is incredibly shortsighted. The Hunter region has a youth unemployment rate of 18 percent but rather than investing in training opportunities the government is selling off campuses and cutting jobs."

News of the sale has come after TAFE NSW's own documents revealed 678 jobs were on the cutting block, via two restructures of student support services and facilities and management logistics. These job cuts include more than 470 jobs from regional areas, including 43 from Newcastle TAFE.

"Gladys Berejiklian and Dominic Perrottet are deliberately dismantling TAFE NSW piece-by-piece," Mr Little said. He was joined in the rally outside the Tighes Hill campus with Labor’s Shadow Minister for TAFE NSW, Jihad Dib and affected TAFE NSW workers.

"It's straight out of the privatisation playbook - under resource the system and then sell it off claiming the private market will do a better job. TAFE NSW should never be privatised."

Mr Little said the deliberate under investment in TAFE NSW was felt particularly in the regions.

"What do the people of NSW get from this gutting of critical training infrastructure? Fewer jobs and a hobbled education system. In the middle of the worst economic downturn the state has seen in a generation the Berejiklian government is closing pathways to prosperity."

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