Australian Greens’ proposed amendments to the Tax Agent Services Act 2008 bill to prohibit Big Four partners with active financial interests from being appointed to the Tax Practitioners Board (TPB) have been passed by the senate despite a last-minute lobbying effort from the accounting profession.
Provisions flagged by Green’s senator Barbara Pocock as an initiative to get “foxes out of the henhouse” passed the senate, with 28 votes in favour and 27 against the TPB membership changes.
The senate chamber voted on the amendments after multiple questions from Coalition senator Dean Smith directed to Pocock and Labor’s senator Malarndirri McCarthy, relating to which community groups had been consulted about the specific amendments.
Pocock told Smith that she did not have a list of names in front of her but that a number of community groups and consultants, including people in small-to-medium professional firms, were keen to see a broader community involvement in the governance structures of tax regulation.
Smith also asked whether the professional accounting bodies were consulted but Pocock only referred to her more general remarks about the consultation process that did not include to the professional tax and accounting bodies.
Neither Pocock nor McCarthy were able to identify any consultation with the peak bodies in the tax and accounting profession prior to the amendments being debated in the senate.
CPA Australia’s head of policy and advocacy Elinor Kasapidis told The Mandarin that the peak accounting body was not consulted on the changes despite them having a significant impact on the accounting profession.
Kasapidis said that the manner of designing the amendments that prohibit certain individuals from taking office as TPB members and mandating accounting professionals to report contraventions of professional rules was “hugely problematic”.
“Measures such as mandatory reporting need to operate effectively in practice and not contravene rights against self-incrimination. Without proper consultation and alignment with existing rules, uncertainty and regulatory overreach can result in detrimental outcomes,” Kasapidis said.
“In addition, banning individuals from sitting on the Tax Practitioners Board because of their links to firms with more than 100 employees is short-sighted and discriminatory. This goes beyond punishing those working in the big end of town.
“Appointments to the Board should always be merit-based. Experienced and knowledgeable people who could be an asset to the sector will now have a black mark against their name due to no fault of their own. This is wholly unfair and will prove counterproductive.”
Pocock said that the amendments were in part a response to the PwC case study and that parliament needed to pay more attention to how individuals and entities in the professional services sector are regulated.
She thanked assistant treasurer Stephen Jones and his team for his willingness to reach agreement with the Greens on the changes.
“The Australian public will no longer tolerate self-regulation and the capture of regulatory machinery,” Pocock said.
“They want it to work fairly and ethically, and in the public interest with penalties tor those who do the wrong thing.”
