For a Government that ran a small-target strategy in the lead-up to the election, this week’s 100-day-in-office milestone for Anthony Albanese and his henchmen has served as a timely reminder of just what can be on the table in such a short space of time. While some measures in and around origin-of-life and the Indigenous Voice to Parliament were anticipated, unexpected transformation of the financial services canvas continue to receive a game-changing rip of news. For those who thought superannuation and financial advice were due for a period of stability better buckle in.
At the annual Superannuation Lending Roundtable last week, Treasurer Jim Chalmers caused much gnashing of industry teeth when he argued the $3.4 trillion super sector should invest more in local social and nation-building investments like housing and clean energy. There is a clear potential conflict in making the best returns to members, and he appears to have missed the point that some $900 billion of SMSF monies are unlikely to invest much in such projects in absence of the right incentives.
The Treasurer also re-announced the seven year old promise of the former Government that they would add a purpose to superannuation by legislation. And I suppose you could say that super is for income in retirement. Something of a historical rewrite is afoot here as possibly hundreds of thousands of Australians don’t view their superannuation that way. Entirely within the rules and with the encouragement of successive governments, people have been saving for retirement in super and many have no intention at all of spending all their super balance during retirement. It’s only making a point about what superannuation is and what it’s for for these people.
The Government has even flagged a review of Your Future, Your Super legislation and super product performance testing.
But I think the biggest factor affected it in the publication of the Quality of Advice Review – Consultation Paper – Proposals for Reform (sort of work started by the old Government). If it passes, the proposals will have a far-reaching effect on financial advice. We summed up the current mess in a ‘whither or wither’ article we released on financial advice a couple of weeks ago, but the Paper prepared by lawyer Michelle Levy will take financial advice back to growth. It suggests paring back lots of the rules that have suffocated financial advisers and pushed many away from the industry. For the final paper, the challenge (now open for submissions until 23 September 2022) will be to make more advice available – without undermining the protections that the teledensity regime has brought with it for 20 years.
Seeking views on proposed changes to the requirements for notifying advice of planned infrastructure and network the right balance. They exist for a reason.
