From the Editor

From the editor: And the hits just keep on coming

I along with many others thought the change of government might mean a lot of the unwarranted attacks on the SMSF sector might diminish.

My thought process being the new minister in charge of superannuation would no longer have industry fund ties and as a result would have a better chance of running the portfolio in a more even-handed manner without any temptation of bias towards one sector over another.

However, I am beginning to see this degree of optimism may be proving to be a little naïve on my behalf as recent comments about the SMSF sector in the media indicate the attacks could in fact be more prevalent and vicious in the immediate future.

The early months of 2014 have seen some of the most astonishing negative tirades about SMSFs and all too predictably without a shred of factual evidence to back them up. It almost seems certain individuals with vested interests against SMSFs now realise they no longer have a champion for their cause within the halls of parliament and have decided to come out on the front foot themselves.

One of the better known attacks came from Australian Workers’ Union national secretary Paul Howes, who became the purveyor of doom suggesting SMSFs were the next disaster waiting to happen, comparing them to, of all things, collateralised debt obligations (CDO) that were at the heart of the global financial crisis. Really? Isn’t this just a little bit over the top?

Let’s not forget Howes happens to also be the deputy chair of AustralianSuper, but of course his comments are for the betterment of the wider Australian public and not just the industry funds. After all, we’re talking about an acronym that will be at the heart of the next financial disaster.

While most participants in the SMSF sector are loath to engage in a slanging match with their industry fund counterparts, some volleys of ammunition do need to be fired back in the opposite direction.

I find it extremely convenient that while all of these attacks on SMSFs merrily continue, no one from the industry fund sector ever mentions one of their own actually forced a change to the legislation to allow the running of a business within a super fund. Heaven forbid one of these public offer funds was acting illegally and would have faced impending disaster had the law not been changed to save its bacon. How many individuals would that have hurt?

But maybe even more laughable were the comments coming out of Credit Suisse accusing SMSF investors of retarding investment, employment and growth in Australia. In the famous words of tennis legend John McEnroe: “You cannot be serious.”

The accusation is that SMSF investors are looking for yield plays only and with their volume are trending management decisions toward dividend payouts as opposed to new investment and thus ending any additional job creation opportunities.

Here’s a thought: why don’t we encourage all of these evil SMSF investors to withdraw their capital from domestic markets and invest in overseas corporations. Surely these problems will then be solved and Australia will return to full employment immediately. I mean, the SMSF capital invested in domestic companies wouldn’t have the slightest effect on the existing employment position, would it?

And of course if this most unlikely scenario was to happen, we all know the same voices who are complaining about SMSFs now would be the ones wailing the loudest about how these investors abandoned local assets and left the economy in the lurch.

The bottom line is all of this hysterical noise hasn’t inflicted any damage on a sector that is chugging along quite nicely and perhaps for all the Negative Nancys out there this is the hardest pill to swallow.

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