The Federal Government's tinkering with superannuation in the May Federal Budget and a rash of reviews have served to undermine confidence.
The Minister for Financial Services, Superannuation and Corporate Law, Chris Bowen, has sought to reassure the financial services industry that it ought to embrace the current rash of reviews into superannuation and financial planning because, ultimately, they will generate policy certainty.
The minister suggested that the findings of the reviews and inquiries, when implemented, might generate as much as a decade of policy certainty.
It hoped that the minister is correct, but history strongly suggests that he is wrong. Successive governments have not been able to resist the temptation to tinker with financial services, no matter how well the existing policy settings may have been working.
What is more, Bowen knows whatever may evolve from the Cooper Review or the Henry Tax Review, he cannot speak for what a Coalition Government might choose to do, even if there is the appearance of unanimity on broad policy issues.
The simple facts of life, as evidenced by research published by PricewaterhouseCoopers, is that the Federal Government’s tinkering with superannuation in the May Budget and the rash of reviews have served to undermine confidence.
The problem for the financial services industry in seeking to restore confidence is that it will be many months before the outcome of all the current reviews and inquiries are known.
Even after the so-called Ripoll Parliamentary Inquiry has tabled its report and the Cooper Review has collected its evidence, there will remain the ultimate findings of the Henry Tax Review.
Indeed, the Henry Tax Review is widely regarded as a ‘sleeper’ for the financial services industry, carrying with it the capacity to ultimately trump all the other policy agendas flowing into the Federal Cabinet.
It is now clear that the Federal Government’s tinkering with superannuation in the May Budget has created uncertainty in the minds of many Australians, particularly those within eight to 10 years of retirement.
Bowen and the Government owe it to all superannuation fund members to ensure policy certainty, and the sooner that is achieved the better.
The term of the current Parliament is fast coming to an end and no one’s interests will be served if a Federal Election disrupts the current review process.
