Sent: 24-11-2009 09:38:01
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Four Topics This Week
1. The Ripoll Report
You'll see a lot of media reporting about the Ripoll Report which was handed down last night. There is a lot in the report and in truth I'm yet to get my head around it. I'll have more to say on this report soon.
2. The Henry Tax Review (officially called "Australia's Future Tax System") has released some CSIRO research into Behavioural Economics and Complex Decision-Making
The research is well worth a read and says much about what makes people tick money wise.
The paper advocates trying to eliminate annual tax returns for as many people as possible except for those with complex tax matters. You would expect most people would this makes a great deal of sense.
At June 2009 the ATO employed about 22,500 people to administer all the laws it has to look after.
One area that has to be dealt with is the never-ending stream of ATO material businesses of all sizes have to deal with. Business Activity Statements, monthly PAYG forms, etc, etc. It just never seems to end.
There has to be a better way and hopefully the Henry Tax Review will suggest some decent reforms which not only work for Government but also for all taxpayers.
I have argued here before that one major problem with the 'system' as a whole is its many layers. From tax in all its various disguises to aged care to social security to super laws and so on. In my view the Henry review and its success or failure will be judged on how well it deals with all these inter-related issues.
You can read the CSIRO research (pdf format) here: http://www.atcbiz.com.au/r.php?r=9janzz2
3. The current edition of The Spectator contains a great article about a lady who had to deal with Sky the UK pay television company. (Unfortunately you can't look at the article on the publication's website unless you stump up some cash.)
She rang Sky because she wanted to change her subscription to "slim down my package". Needless to say she had to ring Sky a number of times before, by chance, happening upon someone who could not help her but was polite.
"One hour on the phone and all I'd managed to do was get myself called Ms". Sky have changed their computer system so she'll "always be thus addressed"!
We've got similar tales to tell when we've had to ring a phone company, an ISP, a gas company, a bank and so on. We've all been contacted by a phone company asking us to "come back" not long after we left to sign up with a rival for one or two years.
One recent Saturday afternoon I decided that I had to find a new mobile broadband package because recent travel away from the mainland capitals had taught me that my current setup doesn't give me an internet connection away from the capitals (my fault for initially buying the wrong product and service).
I can't tell you how long I was on the phone that day but no one will be surprised to learn that it was more than an hour and that I had to make more than one call to the same phone companies.
In the end I gave up still a million miles from working out a viable solution. Before I was stupid enough to make all the phone calls I knew that, most likely, the only way I was going to solve my problem was to visit a phone company's shop front. I only made all the calls in the futile attempt to save some time!
What has this got to do with financial services? Well everything.
I wonder if one reason people are attracted to using Self Managed Super Funds is because they hope that by using a small organisation to administer their super, they don't have to press option buttons on their phone to be put through to the wrong person and know that they don't have to spend at least 30 mins on that phone to solve the simplest issue or go through the horrible privacy checking procedures.
Our recent economic experience clearly shows that a company's size does not ensure its survival. Perhaps people are using small funds because they want to be closer to their money and how it's looked after.
I could, of course, be way off the mark.
Large organisations might think it's clever to get larger and larger and merge and acquire to continue gaining so called economies of scale. But in the end humans like being treated with some level of respect.
Some businesses become just too large to do this consistently well no matter how hard they may try or in some cases pretend that they try.
4. Finally please consider purchasing a copy of my book. You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
Two options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST).
The book can be purchased at the following link: http://www.atcbiz.com.au/r.php?r=5a4agqb
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