Category: Investment

Govt not trusted on super

A fear of government tinkering is fueling a huge level of distrust in the superannuation system, with the large majority of Australians distrustful or unsure of whether the Federal Labor Government will leave super alone.

CoreData-brandmanagement’s latest Investor Sentiment Index, which surveyed almost 900 Australians, has shown nearly three in five Australians (59.8%) do not trust the Government to maintain the current legislation around super. A further quarter (23.2%) say they don’t know whether or not they trust the Government to leave super alone.

Adding to this, almost half of Australian investors (49.4%) say that the Government is not providing a climate which is good for investment and one third do not know if this is the case (32.9%). Less than one in five (17.7%) believe the Government is providing a climate which is good for investment.

Except from Burning pants

Financial planners who offer tax agent services: Treasury options

The Assistant Treasurer today [Mon 29.11.2010] released for comment a paper which sets out options for the regulation of financial planners who provide tax agent services. This follows the Government’s announcement to defer the application of the tax agent services regime until 1 July 2011 for such financial planners to allow extra time for consultation: see 2010 LTN 211 [2].

Mr Shorten said the paper presents 2 options for consideration:

  • Option 1 – bring tax agent services provided by financial planners permanently within the tax agent services regime and be regulated by the Tax Practitioners Board, but do so in a way that minimises any additional compliance burden.

  • Option 2 – investigate and implement what changes, if any, might be made to the Australian Financial Services Licensing regime or its enforcement to ensure financial planners offering tax agent services are regulated to the same standards imposed on tax agents.

Comments are due by 25 December 2010. (Source: Assistant Treasurer’s press release No 018, 29 November 2010.)

Taxation Institute of Australia RESPONSE: The TIA says the Federal Government has an opportunity to close a loophole and ramp up consumer protection with the release of the paper. The paper confirms that doing nothing is not an option, Taxation Institute Senior Tax Counsel, Robert Jeremenko, said. “People relying on tax advice should expect that their adviser meets the highest standards as the Tax Agent Services Regime offers, and that they are also covered by the sorts of protective measures it offers”, he said. (Source: TIA media release, 29 November 2010.)

NAB Fee cuts – there’s more to it

National Australia Bank’s recent fee cuts have received much positive media attention yet the moves mask a deeper strategy by the bank to access cheaper funding lines.
The media has generally portrayed the move as having the aim of keeping existing customers happy whereas it was more likely done as a move to attract new deposit customers.
NAB has performed the worst of the Big Four in attracting retail deposits throughout the rush into deposits sparked by the financial crisis. Even though NAB increased retail deposits by $13 billion to $56 billion from mid-2007 to August 2009 this was well below the  performance of its peers.

NAB’s banking rivals attracted somewhere in the range of $11 billion and $22 billion more of cheaper funding during the recent crisis, leaving NAB now scrambling for market share.It is easly to conclude that NAB’s latest round of fee cuts appear more like a desperate attempt to claw back some of the ground it has lost recently.

The move by NAB is set to cost the bank over $100 million a year.

But if it succeeds in boosting deposit levels, it will prove a cunning move.

If NAB can increase deposits quickly, it will provide a funding source for a potential spike in residential lending, as the newly acquired mortgage broker army from Challenger begins writing the bank’s loans.

The strategy at NAB seems to be a case of giving with one hand and while taking back with the other.

Thanks to www.burning-pants.com/ for the bringing this to our attention