Sent: 23-02-2010 12:07:03
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Mr Cooper & Mr Bowen
Having just returned from the 2010 SPAA Conference you'll no doubt be aware that there is much that I could talk about.
Correctly, much of the media commentary has focused on Mr Jeremy Cooper's thought that Self Managed Super Funds could be a way of the future for all of Australia's superannuation system.
It is fair to say that Mr Cooper was talking about many years into the future and saw this as only possible if consumer's knowledge of financial matters was much higher than it currently is.
No doubt many large fund proponents spluttered when they heard this "outrage".
But one has to say that multi-millions of small funds is a remote prospect. It is highly unlikely that the whole population will be capable of running their own super fund and it is also highly unlikely that everyone will want to. (In much the same way as not everyone wants to own their home.)
If Mr Cooper's comment encourages the larger super funds to face up to some of their own problems, limitations, inadequacies, inaccuracies (both small and gross) and poor behaviour then his comment will have done everyone much benefit.
In any event Mr Cooper made clear SMSFs are not going anywhere (especially the dustbin of history) and will remain a feature of the Australian market-place for the long future.
No matter what your views are about this retirement vehicle you would have to agree that this is a good outcome. Wherever a lack of competition exists you get laziness, waste and excessive costs exists. The competitive tension between small and large funds will never allow a cozy situation.
This also ensures that Australia will never make the mistake of having a centralised retirement fund.
As Mr Cooper said his review's focus on SMSFs merely reflects the size of the super industry that they now represent as a whole.
Mr Cooper was asked several questions by the journalist Mr Alan Kohler which had been written by SPAA Conference attendees. I was disappointed that quite a few of the questions did not relate to Mr Cooper's review and rightly he refused to answer them.
Not long after Mr Cooper made his memorable comment Mr Chris Bowen, the Minister for Financial Services and Superannuation spoke to the Conference. He spoke briefly and was generous to take questions from the floor.
Mr Bowen was forcefully prevailed upon to look into the potentially high tax rates applying to excess concessional contributions that get added to a person's non-concessional contributions and if excess NCCs are created can be taxed at very high rates.
It's sometime not helpful to box politicians into making public concessions especially if that concession has revenue implications.
Despite looking moderately uncomfortable Mr Bowen graciously agreed to look at the issue. Personally I would be surprised if this public appeal will win a reprieve from what was a Liberal Party superannuation tax policy.
Disappointingly Mr Bowen was asked questions which related to Mr Cooper's review and unsurprisingly he safely flick passed these questions. Valuable time and opportunity were wasted.
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/smsfbooktoc.pdf
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/smsfstore.php
I have just released an update to the first edition of the book. The new document seeks to correct some spelling and other similar errors which I had found in the first edition.
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