Richard Webb

CPA Australia says proposed changes to self-managed superannuation fund (SMSF) borrowing rules risk overlooking the real driver of consumer harm, following reports the Government has agreed to ban SMSFs from borrowing to invest in residential property as part of budget negotiations.

The Government will move to ban new SMSF borrowing for residential property purchases after reaching an agreement with the Greens, with changes expected to apply prospectively and take effect shortly after legislation passes.

CPA Australia Superannuation Lead Richard Webb said the shift raises broader concerns about the direction and unintended consequences of the current reform package.

“These proposed changes highlight the ripple effects of the Government’s broader tax reform agenda,” Mr Webb said.

“While targeting SMSF borrowing may appear to address risks at the surface, it does not tackle where much of the real harm originates – upstream in unregulated lead generation and high-pressure sales practices.”

CPA Australia said that, as outlined in its recent submission^[1] to Treasury (as part of the Joint Associations Working Group with CAANZ and IPA), issues with the anti-hawking regime – including the personal advice exemption – should be considered in the broader context of lead generation activity.

“Consumer harm often begins well before formal financial advice is provided,” Mr Webb said.

“Unregulated lead generators can influence or direct consumers toward particular products or strategies without being subject to the same licensing, conduct and accountability obligations as financial advisers.”

“Simply tightening or removing the personal advice exemption risks treating the symptoms rather than addressing the root cause.”

CPA Australia is calling for stronger oversight of lead generation activity, including bringing those who materially influence consumer decisions within the financial services licensing framework.

“If policymakers want to reduce harm, the focus should be on ensuring anyone who meaningfully shapes financial decisions is appropriately regulated and accountable,” Mr Webb said.

Mr Webb said the proposed SMSF borrowing changes may also have unintended consequences for investment choice and retirement planning.

“The initial policy direction indicated superannuation would be largely insulated from these tax changes, but what we are now seeing is a shift that could effectively limit investment choice for SMSF trustees,” he said.

“In practice, this would narrow access to residential property investment within super to Australians with significantly larger balances, potentially creating equity concerns across the system.”

CPA Australia said the full implications of the reforms – including interactions with broader tax changes and housing policy objectives – should be carefully assessed before being legislated.

“These are significant structural changes,” Mr Webb said.

“They should be considered on their merits, with a clear focus on consumer protection, system integrity and fairness – not traded off in the context of broader budget negotiations.”

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Notes:
[1] Submission, 22 May 2026

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Richard Webb

In a joint submission to Treasury, CPA Australia, Chartered Accountants Australia and New Zealand (CAANZ) and The Institute of Public Accountants (IPA) are calling for proposals to shift Compensation Scheme of Last Resort (CSLR) costs onto self-managed superannuation funds (SMSFs) to be reconsidered, warning it will unfairly burden investors while failing to address the true causes of financial losses.

Richard Webb, Superannuation Lead at CPA Australia, said singling out specific categories of retail investors for reduced statutory rights would not resolve the CSLR’s funding challenges.

“Singling out specific groups of retail investors for the loss of statutory protections won’t fix the unsustainably expensive CSLR levy. It simply shifts costs onto investors while ignoring the upstream drivers of loss – including product failures and misconduct prior to advice and distribution,” Mr Webb said.

The call comes amid rapidly escalating CSLR levy costs, which are projected to rise from just $4.8 million in 2024 to $75.7 million in 2026, and could grow to$127 million by 2027 – far exceeding the $20 million subsector cap and highlighting structural issues in the scheme’s funding model.

Mr Webb emphasised that the CSLR must operate as a genuine last-resort scheme, supported by effective oversight and accountability right across the financial system.

“For the CSLR to deliver the greatest benefit, it must truly be a scheme of last resort, and that means the upstream links in the chain must work properly. A sustainable model requires all sectors responsible for those losses – particularly managed investment schemes – to contribute fairly,” he said.

“It’s critical that costs caused by product failures are internalised by relevant product issuers, rather than being borne by unrelated sectors through special levies.

“Strong product governance must be incentivised, rather than increasing systemic risk and cross-subsidisation.”

Mr Webb said proposals to shift costs onto SMSFs were poorly designed and risked undermining confidence in the system.

“Making SMSFs fund the CSLR directly is poor policy, especially given that the current funding problems were caused by earlier failures. The people responsible for those losses should pay for them – not the investors who were harmed.

“The current CSLR regime already shows the unfair and disproportionate cost burden imposed on currently registered financial advisors and extending this to SMSFs simply compounds the problem.”
CPA Australia is calling for a holistic approach to CSLR funding, including product providers and relevant service providers, to ensure accountability across the financial services sector while maintaining fair protections for all investors.

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Sarah Abood

The Financial Advice Association of Australia (FAAA), in consultation with Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia, and the Institute of Public Accountants (IPA), has released a guide for the financial planning and accounting communities containing practical guidance about claiming a tax deduction for financial advice fees. This follows the release of the ATO’s Tax Determination TD 2024/7 in September 2024.

FAAA CEO Sarah Abood says the FAAA is particularly pleased to provide financial advisers and accountants with a practical guide that has been ratified by the accounting associations.

“The implications of the updated ATO guidance are important for both financial advisers and accountants. We have worked together with the accounting associations so that the guidance is practical and consistent for both.

“The publication of this guide follows more than six years of advocacy from the FAAA to encourage the ATO to update its guidance. The ability for taxpayers to legitimately claim a portion of the initial advice fee for financial advice clients is new and is live now.  The guide also provides clarity regarding the claiming of ongoing fees.

“Advisers can now support their clients to claim a legitimate tax deduction for financial advice fees with confidence.”

The guide includes the legislative background and definitions of tax (financial) advice and taxation law. It outlines three potential methodologies for apportioning fees and provides examples, Statement of Advice text and fee summary templates, for active use.

Tony Negline, superannuation and financial services leader at CA ANZ, commented: “We are proud to collaborate with the FAAA, CPA Australia and IPA on this combined industry guide to help both financial advisers and the accounting community to understand the practical implications of the tax deductibility of financial advice fees, which will ultimately benefit our clients.”

Richard Webb, superannuation lead at CPA Australia, added: “We look forward to further explaining the changes and working with our members and the financial advice community to collaborate and embed the use of this guide.”

Tony Greco, senior tax adviser at IPA, said: “We hope the guide is helpful for the financial services community, in conjunction with our members acting as the client’s tax adviser, to have real clarity of the approach to apportionment and deductibility more generally.”

Read the guide

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