As if the market volatility and geo-political uncertainty of January and February were not enough for Australian financial planners to deal with, they are now witness to the unedifying spectacle of policy uncertainty around both tax and superannuation in an election year.
Most financial planners have either had or are having conversations with their clients about navigating the market volatility which kicked off 2016. Much of that advice has entailed urging clients not to be panicked by daily headlines and to look to the long-term. It is much harder for planners to give advice with respect to the policy uncertainty around capital gains tax, negative gearing and superannuation tax concessions.
Negative gearing has been a fact of life in Australia for so long that it has come to represent a corner-stone for the investment strategies being pursued by many Australians. Similarly, many plans have been set in place based on the existing capital gains tax settings. It follows that a period of rampant political speculation can only serve to further unsettle investors who have already been made nervous by market volatility.
None of this was lost on SMSF Association chief executive, Andrea Slattery during her organisation's national conference in Adelaide last month where she bluntly told the Federal Treasurer, Scott Morrison, that given the market volatility and continuing speculation around policy, she had never known confidence in superannuation to be at lower ebb.
To be fair to Morrison, he used his address to the SMSF Association conference to try to inject some certainty into the debate, pointing out that he believed the "purpose" of superannuation was to relieve pressure on the age pension, that he believed there was a need to inject some more equity into the superannuation tax concessions, and that he believed super should not be used as an estate planning tool.
Sadly for Morrison, barely 24 hours' after he had tried to put some sensible points to the planners and accountants attending the SMSF Association conference, he was confronted by media reports suggesting the Government might consider allowing younger Australians to opt out of the super guarantee, or, possibly, use their super accumulations towards the purchase of a home.
Those reports gained further currency when the Deputy Prime Minister, Barnaby Joyce, indicated he saw no particular problem with the use of super accumulations for the purchase of a home.
When the Prime Minister, Malcolm Turnbull, was outlining the reasons why he was contesting the leadership of the Liberal Party, he spoke of the need for orderly and informed debate on key policy issues such as taxation. His problem through much of February was that the debate had become uninformed, highly disorderly and driven by a speculative media cycle.
That is why the ubiquitous CPA Australia chief executive, Alex Malley, was correct when he lamented that the Government had not opted to pursue the traditional and more orderly policy development process of a tax green paper, followed by a tax white paper.
From a political perspective, the Government cannot afford for the policy development processes around tax and superannuation to be dictated by headlines. From an economic credibility perspective, it owes it to investors and superannuation fund members to deliver policy certainty.