Election brings few sad faces in financial services
The re-election of the Liberal/National Country Coalition Government under Prime Minister, Scott Morrison, is being widely regarded as a win for the financial services industry although views in the superannuation sector are more mixed.
The re-elected Coalition is being welcomed by fund managers, financial planners and self-managed superannuation fund (SMSF) trustees because it means there will be no change to the situation around refundable franking credits or capital gains tax.
It is being welcomed by residential property investors and their planners because it means no change to the negative gearing arrangements.
The status quo also means that there will be no reduction in the annual non-concessional contributions cap, which the Labor Party had proposed would be reduced from $100,000 to $75,000.
However, it is receiving a mixed welcome from superannuation funds and insurers because of the likelihood that the re-election Government will restart the passage of legislation impacting insurance inside superannuation.
SMSFs have emerged as particular winners because of the certainty around refundable franking credits and because the Coalition had made clear that it was intending to allow borrowing within superannuation.
The Coalition’s policies had been criticised by the Australian Institute of Superannuation Trustees for doing very little to improve equity and the long-term sustainability of superannuation, with the industry funds body claiming its policies would largely benefit those with the means to make large voluntary contributions.
However, the Coalition has committed to the substantial implementation of the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry meaning that grandfathered commissions will be ended according to the Government’s time-table.
However, there is still hope for life/risk commissions, with the Government having previously signalled its intention to allow the Life Insurance Framework and its review to run their course.
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