Issue: 223
Sent: 06-07-2010 12:21:06
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Cooper Review
Tony Negline
Yes the Government had the good sense to release the Cooper Report yesterday.
It has not accepted or rejected any recommendation of the report.
Minister Bowen has merely said that it "will now consider the final recommendations of the report before providing its response and looks forward to consulting the industry on the key proposals."
In my view this is a much better way to release a reform document than the way the Rudd Government elected to release the Henry tax review.
The Cooper report is actually two documents - firstly an "overview and recommendations" document and a "recommendation packages" document. As a whole these two documents will be far too big for most people to get their heads around as a whole.
Most people should consider reading the recommendations in the "overview and recommendations" document. If you see something in that document then head over to the relevant parts of the "recommendation packages" document.
As always with these large reports the sound bites and 1,000 word summaries provided by media outlets have reduced the report to something almost beyond recognition.
Much public comment will be made of the likely savings from the SuperStream and MySuper ideas.
Also as always the devil is truly in the detail.
But the devil is also in the lobbying effort which many organisations will now begin. And also another issue is the imminent election and the next government and Minister. The super industry doesn't like the MySuper idea.
Unless the election is held in later 2010 or even 2011 (which is possible under the Constitution but highly unlikely) we're unlikely to hear much formally about the Cooper report in the next few months.
It will take years to legislate.
One a completely separate issue I have mentioned before the issue about Government's over promising and the potential liabilities it will throw up in future years.
The Government has decided to keep its super promises developed as part of its response to the Henry Review and its new resources tax. In the four years starting 1 July 2010 and ending 30 June 2014 the Government expects to spend $2.05b on these new super concessions. This net cost includes the $350m saving from a recent reduction in the Government Co-contribution.
Minister Bowen's press release announcing that the Government's relatively new super policies had survived the new resources super tax he said, "Under the Government's superannuation reforms, a 20 year old entering the workforce today, on average weekly earnings, will retire with an additional $200,000 in savings." (my emphasis)
I'm not sure a financial services license holder would be able to make such claims without disclosing how they arrived at the figure. The Federal Government exempted itself from such obligations.
In any case my suggestion is, if you know anyone who is 20 and earning average weekly earnings, make sure they keep a copy of this press release. It may come in handy when they retire (in some unidentified timeframe).
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
The second edition has just been released.
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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