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FSA Policy Agenda


FSA Logo2008In August 2011, the Australian Centre for Financial Studies (ACFS) released a research report Private Savings: The Role of Life Event Savings Products commissioned on behalf of the FSA. The ACFS is a not-for-profit consortium of academia and industry, specialising in leading edge finance and investment research.

The research showed that individuals face a number of challenges over their lifetime, such as financing education, housing, health and retirement, for which many are unprepared. The report noted that the financial challenges that these life events create can be met, in part, through an adequate, sustainable savings pool or in other cases, government support. Conversely, a shortfall in these areas will directly impact the range of opportunities available to an individual over their lifetime.

The report concluded that the insurance bond framework, offered by Australian friendly societies, is the best mechanism to prevent medium-term savings shortfalls. However there is a disincentive for low to middle income earners to use these products.

The FSA has developed a policy options agenda to address this disincentive that focuses on the following priority issues:

  • a reduction in the tax rate applied to friendly society benefit funds from 30% to 20% to address the lack of neutrality in the tax system between IBs and superannuation;
  • the introduction of an education savings co-contribution scheme for low and middle income Australian families to help stimulate this form of savings; and
  • the immediate restoration of an appropriate tax-free threshold to earnings paid to minors under scholarship plans, which are currently taxed at punitive rates as high as 66 per cent.

As part of the ongoing advocacy efforts, COBA and the FSA met with Treasury officials in November 2013 to advance this policy agenda. In late November 2013, the FSA lodged this submission with the National Commission of Audit.

Related Submissions & Documents

For more information in relation to friendly societies should contact:

Alex Thrift
Policy Adviser
02 8035 8447
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Friendly Societies Contact

Alex Thrift
Policy Adviser
Ph: 02 8035 8447
Email Alexcontact-arrow

Luke Lawler
Head of Public Affairs
Ph: 02 8035 8448
Email Lukecontact-arrow