Senator the Hon Nick Sherry, Minister for Superannuation and Corporate Law addressed Financial Services Partners advisers at their annual conference on 7th February 2008. This was quite a win for Financial Services Partners as it was the first address made by the new minister to a financial advisory group since taking office.

Senator the Hon Nick Sherry, Minister for Superannuation and Corporate Law addressed Financial Services Partners advisers at their annual conference on 7th February 2008. This was quite a win for Financial Services Partners as it was the first address made by the new minister to a financial advisory group since taking office.

Minister Sherry said “We intend to keep a close eye and firm control on inflation” and was keen to emphasize the new government would exercise fiscal responsibility. A number of potential government initiatives over the next year to 18 months were outlined including:

Simplification of Product Disclosure Statements
The new government will set up a financial services working group to undertake a review and simplification of product disclosure statements. “An unreadable document is not a useful document” Minister Sherry said. We are sure consumers will welcome these changes.

Review of legacy products
The government intends to review the many older style superannuation products still operating and bring them up to date with newer offerings. These older products may have increased risk, increased opportunity for fraud and may be more costly to consumers.

Mortgage broking regulation changes
At the present it is the responsibility of each state to legislate mortgage brokers’ activities. This has caused concern in the new government, especially in light of the sub-prime housing issues in America. The government proposes a new set of national legislation to cover all Australians consistently.

Changes to lost superannuation

In late 2007 there were nearly 6.3 million lost accounts on the register, totalling approx $12.7 billion. A new system, an autoconsolidation or rolling together system, will be implemented in 2009. This should make it easier to reunite people with their lost super.

Minister Sherry also mentioned the new First Home Saver Account to help Australians buy their own home.

The financial pressures faced by first home buyers have increased, with the price of an average home rising more quickly than the average annual wage, and first home buyers spending a greater proportion of their total income on mortgage repayments than at the beginning of the decade. For example, housing costs for first home buyers as a proportion of total income have risen from 20% in 1999-00 to 27% in 2005-06. The Government will provide further details on the accounts in a consultation paper to be released in the near future and we will keep you up to date with this initiative.