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		Current Issues

Promoting an effective regulatory framework for the industry   [top]
Trustee corporations are currently licensed and regulated under individual State or Territory legislation to carry out their traditional business, including acting as executor or administrator of deceased estates, administering personal trusts, and operating as guardian or attorney.

In March 2008, it was announced that, as part of the Council of Australian Governments (COAG) Reform Agenda, the Commonwealth would be assuming responsibility for the regulation of trustee companies. The TCA is liaising with Treasury about the new arrangements, which are expected to apply from July 2009.

Trustee corporations are already subject to certain Commonwealth legislation in respect of some of their ‘non-traditional’ activities, ie:

• the Superannuation Industry (Supervision) Act 1993 (SIS), when they act as an "Approved Trustee" for superannuation funds, or
• the Managed Investments Act 1998 (MIA), when they operate managed funds as a "Responsible Entity".

Seeking the ability to charge realistic fees for trustee services   [top]
Trustee corporations in most States and Territories are subject to legislative fee caps in respect of some of their services. The Association has submitted to government that, consistent with the principles of national competition policy, there should be deregulation of fees.

It should be noted that there is no lack of competition in the products and services offered by trustee corporations - this comes both from within the industry and from other financial service providers, such as accountants, solicitors, financial planners and banks, which provide some of the same products or services.

We believe that adequate protection for beneficiaries/clients is provided by:

• competition,
• the requirement that trustee corporations advertise their fees, and
• general regulatory oversight.

Promoting equitable taxation of trusts   [top]
There is common misconception that trusts are primarily used for tax avoidance

In fact, the vast majority of trusts are created for legitimate reasons, including protecting the interests of minors and the disabled, and for charitable purposes. Those arrangements generally are merely conduits through which assets can be invested and maintained during the beneficiaries' lives or for the benefit of future generations.

The TCA seeks to ensure that any Government proposals for reform of the taxation system do not have unintended, adverse consequences for the legitimate use of trusts or for their beneficiaries.

Seeking equitable APRA levies on superannuation funds   [top]

Several TCA members act as Registrable Superannuation Entity Licensees (RSEL) for many Small APRA Funds (SAFs). These are superannuation funds with less than 5 members who do not themselves wish to take on the responsibilities of also being trustees of those funds.

We believe that the system for calculating APRA's supervisory levies, which includes a flat fee of $500 pa per SAF, results in SAFs incurring a disproportionate share of the cost of APRA's supervision of the superannuation industry. The Government has acknowledged that supervisory costs per fund are lower the greater the number of funds under the same trustee – in this regard, it is relevant to note that the great bulk of SAF business is handled by 3 TCA members.

Promoting effective protective arrangements for the elderly   [top]
The TCA believes that much of the potential trauma associated with the personal finances of elderly persons, particularly those with conditions such as dementia, can be addressed by giving early attention to effective protective arrangements. This includes:

• preparing a valid and up-to-date will that clearly expresses a person's wishes in respect of their estate, and
• creating an enduring power of attorney, whereby a third party is appointed to make financial (and possibly other) decisions on behalf of a person if that person becomes unable to manage their own affairs.

We have submitted to the Government that:

• the relevant legislation should be unified across Australia, to overcome the difficulties that frequently arise with wills and powers of attorney outside the region in which they are drawn,
• a register of powers of attorney should not be established ahead of very careful consideration as to whether the benefits (such as enhancing accountability and facilitating better protection against abuse) offset the costs (including reduced privacy and increased expense), and
• in situations where elderly people are unable to look after themselves and a Court appoints a financial manager and/or a personal carer, the body charged with reviewing their performance should be independent of those parties.

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