Financial services players give Budget mixed welcome

2020 federal budget 2020 budget Josh Frydenberg FSC IPA superanuation tax

6 October 2020
| By Mike |
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The Federal Budget has received a mixed reception from the financial services industry, particularly its measures around superannuation.

While some senior superannuation executives were calling for greater detail around the Government’s new superannuation package, the Financial Services Council (FSC) said it believed it hit the mark.

“The Government has risen to the challenge created by the current economic downturn and has announced targeted stimulus that will help businesses recover and create jobs. Importantly, consumers will be protected by comprehensive reforms to the default superannuation system, which will eliminate the scourge of multiple accounts and fees,” FSC chief executive, Sally Loane said.

The Government has announced a ‘Your Super’ package of superannuation reforms that prioritises the interests of consumers and will benefit Australians by $17.9 billion over the next 10 years.

“The ‘Your Super’ package will permanently address the scourge of account duplication and fund underperformance. The Productivity Commission concluded that account duplication alone was costing consumers $2.6 billion every year.”

“The FSC congratulates the Government for committing to the Royal Commission’s ‘default once’ recommendation, which will prevent unnecessary account erosion from fees and the creation of new duplicate accounts.”

For accountants, the Institute of Public Accountants (IPA) said that the Budget had introduced considerable fiscal stimulus to move the economy forward for the short to medium term, but had failed to address the fundamentals for the long term.

“We expected that the Budget would deliver business incentives, tax cuts and infrastructure investment to create jobs and assist businesses to climb out of the COVID-19 mire,” IPA chief executive officer, Andrew Conway said. “And there is no doubt that thousands of Australians will benefit from earlier tax cuts which in turn will hopefully be realised at the cash registers of small businesses across Australia.

“Tax cuts will always be a true sweetener but there is no point having the sugar if we are not addressing the cavity that is left behind by ignoring the need for holistic tax reform.”

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