Financial planners held hostage by Henry Review
The Government's failure to release the Henry Tax Review has angered financial planners.
The financial planning industry has every right to feel irked that the Federal Government has not yet released the results of the Henry Tax Review.
The degree to which planners find the absence of a final report irksome was revealed during Perennial Investment’s recent conference in Melbourne, where more than half the attendees appeared openly irate at the Government’s failure to release the report.
The level of their angst is hardly surprising given the degree to which the Rudd Labor Government has made the Henry Review elemental to virtually all policy development leading into the next Federal Election and well beyond.
Given the broad terms of reference of the Henry Review and the length of time that it has been on foot (since May 2008), it has now been a constant in discussions around policymaking for nearly three years.
What is more, given the degree to which it cuts across everything from Commonwealth/State relations to levels of withholding tax and the future of the superannuation guarantee, the Government’s continuing delays are simply serving to create unnecessary uncertainty.
Each time a financial planner sits down with a client to discuss future strategies, such consultations must carry with them the caveat of what may ultimately be contained in the final report of the Henry Review.
What is more, there will be high levels of uncertainty even after the final report of the Henry Review is tabled in the Parliament because the Government is certain to cherry pick the recommendations to suit its purposes.
According to the timeline for the Henry Review, the secretary of the Treasury, Ken Henry, delivered his panel’s findings to the Government in December. It was always envisaged that the Government would then make the report public before the end of February.
It is now clear that the Government will utilise at least some of the Henry Review recommendations in framing the May Federal Budget, but that process does not of itself preclude releasing the report and opening the way for broad-ranging discussion.
Indeed, it seems to be in everyone’s best interests that a broad-ranging debate take place around the Henry recommendations before the Government seeks to enshrine them in the next Federal Budget.
The Rudd Government has been the subject of a good deal of criticism with respect to the number of reviews and inquiries it has commissioned in its first term in office. The Henry Review represents the most important of those reviews. The sooner it is released, the better.
AUTHOR
Mike Taylor
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