Financial services industry bodies have generally welcomed the Government’s response to the Henry Review of Taxation, but the support has been qualified in some quarters.
While some of the initiatives announced by the Government have been universally welcomed, such as the increase in the Superannuation Guarantee from 9% to 12% (although this was not recommended by the Henry Review), there was disappointment expressed about other initiatives that appear to have been overlooked.
AFA CEO, Richard Klipin, while welcoming a number of the Government’s recommendations, said the AFA is disappointed that the Government has not yet, as part of its response to the Henry Review, adopted a recommendation from the Ripoll Inquiry to consider the implications of making the cost of financial advice tax deductible:
“If Australians are to make the most of their retirement savings they are going to need quality financial advice,” said Mr Klipin. “Tax deductibility would make access to advice – which will, in the future, be advice people will have to pay a fee for – much more affordable.”
Mr Klipin added that he hoped the Government would address the issue of tax deductibility of advice in this month’s Federal Budget.
The FPA‘s Acting CEO, Deen Sanders, also congratulated the Government on its new tax plan, commenting that the announcements are almost entirely in line with recommendations the FPA made to government about changes to the superannuation system:
“Encouraging more people into Super and effective savings is a strong way to ensure a brighter long-term financial future and we support the government’s thinking in this area,” said Mr Sanders.
But Mr Sanders also intimated the FPA was looking for more reform initiatives:
“There is still plenty of work ahead to digest the detail of the Henry Review, but in the meantime the government’s response to the Superannuation section of the review is welcome,” he said.
IFSA has called the Superannuation Guarantee increase ‘… a stunning win for Australians’, and ‘… the most significant reform of superannuation in a generation.’
CEO, John Brogden, said millions more Australians will face a better and more secure retirement:
“I congratulate the Government on today’s announcement. Every Australian will benefit from increased savings. Australians will face retirement with greater security and confidence,” said Mr Brogden.
The Association of Superannuation Funds of Australia (ASFA) was equally glowing in its praise of the Government’s response to the Henry Review, saying that working Australians can look forward to a better and more dignified retirement.
ASFA CEO, Pauline Vamos, said “This Government has recognised that we have an aging population who have an expectation that they will retire with dignity.”
“The uncertainty that prevailed while the Henry Review was underway and while it was being considered has now come to an end and the Government has reconfirmed the central role of superannuation in personal and national savings,” said Ms Vamos.
The financial services industry will also be paying close attention to any further initiatives that may be included in the Government’s 2010 Federal Budget papers, to be handed down this month.
Click here to access a copy of the Government’s media release summary of its future tax plan, which also includes a list of the Henry Tax Review recommendations it has rejected.
