The financial services sector has generally welcomed the measures outlined in last night’s 2010 Federal Budget papers, particularly within the superannuation industry. But disappointment has been expressed about measures that have been called for, but not included.
The industry has also united in support of the Government’s response last night to the Johnson Report – Australia as a financial centre: Building on our strengths, which was released earlier this year. The Government has supported most of the Report’s recommendations, including:
- The introduction of an Investment Manager Regime
- The establishment of an online regulatory gateway
- The development of an Asia Region Funds Passport
A task force of senior financial sector representatives is to be set up to work towards promoting Australia as a financial centre for the region.
Chaired by the Report’s author, Mark Johnson, the other task force members are:
- Paul Binsted (Sydney Ports)
- Jo‑Anne Bloch (Mercer, formerly FPA CEO)
- Alf Capito (Ernst & Young)
- Phil Chronican (ANZ)
- Jeremy Duffield (Vanguard)
- Craig Dunn (AMP)
- Shane Finemore (Manikay Partners)
- Paul Schroder (AustralianSuper)
AFA
The AFA said the Budget announcements begin to address the big issues facing Australia. CEO Richard Klipin said the Budget announcements, together with the recent ‘Future of Financial Advice’ reforms and the Henry Review recommendations “… will help reduce debt and ensure we pay our own way; they will help address the problems of an ageing population and they will build on Australia’s reputation as a centre of excellence for financial services and an exporter of capability.”
However, AFA President, Jim Taggart, expressed disappointment that the Government has not made financial advice tax deductible:
“Australians need quality financial advice in order to make the most of their retirement savings. In the future, people will have to pay a fee for financial advice. If that fee was tax deductible, it would be much more affordable,” said Mr Taggart.
IFSA
IFSA‘s response to the Budget focused on Australia’s drive to become a financial services centre, with CEO, John Brogden, commenting that the Budget will greatly advance Australia’s ability to become a global investment hub:
These measures will make Australia more attractive for international investment…
“The announcements to reduce Interest Withholding Tax, introduce a new Managed Investment Trust regime and establish a Centre for International Finance and Regulation all advance Australia’s standing internationally,” said Mr Brogden, adding, “These measures will make Australia more attractive for international investment and attract a greater share of global capital.”
ASFA
ASFA has commented on how the Budget measures and other recent policy announcements have continued to place superannuation as the preferred long term savings vehicle:
‘The Budget, together with the Government’s response to the Henry Report, provides both certainty and incentives for working Australians to save for their immediate needs and for their retirement.’
CEO, Pauline Vamos, said, “The Government, in this budget has made the superannuation system fairer, more adequate, and has provided stability and clarity to ensure its sustainability.”
FPA
The FPA has offered a positive response to the Budget, noting it will ‘… vastly improve the savings culture in Australia.’
Commenting on specific elements, acting FPA CEO, Deen Sanders, said “Along with the superannuation measures announced last week, in particular the increase in Superannuation Guarantee (SG) from 9% to 12% and the $500 super subsidy for low income earners, the 50% tax discount on interest on bank deposits will improve retirement benefits and generally build a savings culture for low income earners.”
But Mr Sanders added, “While we welcome measures that improve the savings culture of Australians we are disappointed that many of these measures will not be implemented for a number of years providing no immediate benefit to Australians.”
“Overall the budget has delivered prudent spending with good changes for superannuation, improved savings culture and enhanced capabilities as an international financial centre”, said Mr Sanders.
