Compliance Program for Self Managed Funds and Approved Auditors
I’d like to thank the Institute for the opportunity to speak here today.
In recent speeches we’ve talked about the changes resulting from the super simplification measures. There is a lot for the self managed super market to consider. For the Tax Office, the new changes have caused us to take a closer look at our compliance program.
In late-2005, we sent the Department of Treasury a report outlining our thoughts for improved regulation of this market. We also outlined the irritants industry and the professional associations have conveyed to us. A lot of these were addressed in the measures you know as super simplification.
Where we introduce a single new measure that has a minimal impact, our compliance changes are relatively low key. However, broad and encompassing measures such as super simplification provide us with opportunities to make improvements in the way that we operate and regulate the self managed superannuation market.
We are now well on the way to the biggest change to superannuation ever. On 1 July, a little over two weeks from now, a lot of the new measures will start. And a lot of these will impact on self managed superannuation funds, approved auditors, and people who provide assistance and advice.
For most of this market, we see regulation as a broad partnership rather than us taking a compliance-centric view. By that, I mean most funds try to do the best they can but some make errors along the way, and this is where our assistance, and yours, can help trustees to fix their problems. The minority of trustees, those who refuse to do the right thing, will be subject to our compliance action much more so than in the past.
Let’s have a look at what the market is doing at the moment.
You would have seen media reports that the number of registrations is increasing substantially. We’ve had over 27,000 new funds to the end of April this year and are on track to surpass the high set in the year ending June 2004. These figures have now changed as early as lunch time today with the May figures being available. This takes us up to 34,522 for the year so far, compared to the high in 2003-04 of 34,560.
This chart shows the registrations on a monthly basis going back to July 2003. You can see that the results have peaked up to record levels twice over the course of this financial year. Growth is strong at the moment. Registrations dropped slightly in April however, there has been a sharp spike to 7296 registrations for May. What is pleasing for both you and me is that only 13% of the May registrants lodged without an agent indicator. In 2003-04, 25% of funds registered without an agent. For 2006-07 it is down to 18%.
The value of assets held by self managed funds continues to grow and is running second to retail funds. Together, retail funds and self managed funds have over half the total amount of superannuation in Australia.
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