| Annual Review 1998 - Chairman's Report |
This Annual Review marks the first full year of
operation for the Investment Savings and Insurance Association. There is no doubt the past
12 months have been extremely challenging for the industry with domestic and international
events creating volatility in both the economic and political spheres.
Members of the Board have shown a commitment to the
Association above and beyond expectations and often while the needs of their own
organisations have made significant calls on their time.
Some have gone through demutualisations and subsequent
successful stock exchange listings. The industry has also witnessed a number of
rationalisations as members have sought greater economies of scale within what is an
increasingly competitive environment.
Savings and taxation issues remain as major issues for
the Association.
We wholeheartedly support both clarification and
simplification of the tax system to ensure overall savings attitudes and behaviours are
not influenced by distortionary market signals. Unfortunately, it would be fair to say
that recent government initiatives have not exactly been helpful in minimising these
effects.
While the proposed tax credit system is better than the
current tax treatment of life insurance and superannuation, it is also complex, costly and
lacking in universal application. And the removal of the ability of superannuation funds
to take the tax-free gains from index funds seems ill-conceived and penalises savers who
use managed funds as their preferred investment vehicle.
Amid growing concern that the Coalition Government had
not focused any attention on retirement income policy, the Board decided to take the
initiative and launched the 'ISI Report on Retirement Savings: A Wake- Up Call'. This
received a very positive response and has made a significant contribution to the savings
debate.
Some positive gains have been achieved this year with
the Association continuing to build strong relations with Parliament and key
decision-makers. The Association has also significantly raised its public profile and put
in place a series of initiatives to communicate its objectives to a much wider audience.
There can be little doubt that the decision to merge the
Life Office Association and the Investment Funds Association has paid handsome dividends
in terms of the focus and profile the integrated Association has been able to build among
its key audiences. The contribution of our outgoing chief executive, Roger Gill, to this
process has been substantial and on behalf of all members 1 wish to express to him our
sincere appreciation of his efforts and our very best wishes for his future endeavours.
Our challenge for the future will be to continue to
effectively represent the financial services sector and maintain the strong profile we
have developed, whilst remaining able to adapt to the rapidly changing shape of our
industry and its environment.
Ross McEwan
Chairman
