The Cooper review now stands as the solitary paper to be delivered after the whirlwind of activity of the past two weeks.
Late last month, the government released its response to the Ripoll report in the form of its “Future of Financial Advice” reforms.
Last week, it was the tax man’s turn, with the Henry taxation review delivering what many considered a fizzer of a fireworks display. While many have criticised the Henry review for not going far enough in taxation reform, there were many benefits to come out of the process.
Australians aged 50 and over will benefit from concessional superannuation contributions, with the superannuation guarantee (SG) to be boosted from 9 per cent to 12 per cent, the government announced.
People aged 50 and over will be able to make $50,000 in annual concessional superannuation contributions if their superannuation balances are below $500,000.
This measure is expected to benefit 275,000 people, according to Treasurer Wayne Swan.
The SG will also be increased to 12 per cent by 2020. The SG will first increase by 0.25 percentage points in 2013/14 and 2014/15, followed by 0.5 percentage point increments until 2020.
The government will also keep the co-contribution scheme.
The SG age limit will also be raised to age 75 from July 2013, with 33,000 employees expected to benefit from the initiative.
An employee aged 30 today on average weekly earnings will retire with an additional $108,000 in superannuation, according to government estimates.
Over the next 10 years, $85 billion would be added to Australia’s pool of superannuation savings, Swan said.
Post-retirement products will be discussed with key groups in the superannuation sector, according to an industry insider.
As the industry continues to digest Henry’s verdict, all eyes are now on Jeremy Cooper and the government over its response to the superannuation system review.
While it is not known when Cooper will be delivered, the report’s phase three recommendations on self-managed superannuation fund (SMSF) solutions have stirred up quite a bit of interest.
“We’re very pleased that the review has made the comment that SMSFs are effective and are here to stay and they do have an important role to play in the industry,” Self-Managed Super Fund Professionals’ Association of Australia (SPAA) chair Sharyn Long said.
However, SPAA has raised concerns in regards to the proposed measures to strengthen the independence of auditors.
Many firms that provided a range of services to SMSFs currently had adequate controls that ensured full audit independence, Long said.
“I guess the devil will be in the detail in terms of knowing exactly how the recommendation will unfold,” she said.
“But I find that a very strong recommendation and one that could potentially lead to a need for accounting firms, or firms servicing SMSFs, to restructure.”
Meanwhile, SPAA welcomed enhanced controls and systems relating to SMSF rollovers to help prevent the incidence of illegal early release schemes and fraud.
Other proposals in the Cooper review included a ban on artwork and collectibles in SMSFs and the removal of the 5 per cent house assets rule.
SPAA urged particular caution on these measures as they impose restrictions on how fund assets can be invested.
It is likely the budget will beat the release of the Cooper review findings, though we’re all hanging for Mr Cooper.
