A couple of things on Hedge Clippings' radar today… including the Hayne Royal Commission's report delivered to the Government today prior to being made public next week (assuming some politician doesn't leak it earlier, but they wouldn't do that would they?), an article published in today's Australian showing the number of inactive accounts in the superannuation system as exposed by the Productivity Commission, and the US 10 year bond rate which influenced the US Fed's Policy change.

Let's start with ghost accounts and the revenue they make for superannuation funds at their members' expense. With 25 million super accounts in the system, and 7.8 million of them being inactive or duplications, the funds are ripping a staggering $2.6 billion a year out of their members' combined balances. Surely there's a simple way to prevent this - namely requiring each person's Tax File Number to be used as the core and common identifier on every super account.

When first coming into the work force every employee has to apply for a TFN, and has to choose a super fund. When changing employer, and/or opening a new super account, this would, or could, throw up an immediate flag with the option to switch, close or combine accounts.

Of course, using the TFN would alarm the alarmists, who would claim it was a stealthy way to introduce a common identifier - a.k.a. the Australia Card - even though it already exists. However, the $2.6 billion a year in fee savings could more than pay for its introduction! While it may sound simple to Hedge Clippings, don't expect the superannuation industry to support the idea and wave goodbye to all those fees for no reason.

As far as the Commissioner Hayne's final report is concerned there's no doubt he'll be forthright. Having already given us a taste in his courtroom, and the interim report, the final version is unlikely to have any major revelations but will undoubtably have some firm recommendations. We hope these don't only focus or result in more legislation and red tape; rather enforcement of the existing requirements in the Corporations Act to operate fairly, efficiently and honestly, and a lengthy zebra suntan for those deliberately and consistently found to have not been doing so.

Both the HRC and the PC's findings and recommendations are going to be negatively affected by the upcoming election and whichever party and their respective vested self interest groups is in power after election night. This will be disappointing, as there's a risk that both the HRC and PC's findings run risk of going the same way as Ken Henry's review of the taxation system.

For those who can't recall the Henry Review, a.k.a. Australia's Future Tax System Review, it was commissioned back in 2008 under Kevin Rudd's 2020 summit (help! we're nearly there), and released in 2010. Unfortunately, superannuation was excluded from the review (how bright was that?) but there were still 139 recommendations, of which over 100 ended up in Canberra's waste paper basket. One of the one's that did make it into law was the Mineral Resource Rent Tax, which in 2014 eventually went the way of the dodo under Tony Abbott.

Elsewhere on this week's radar: Mid last year there were expectations of a continued Fed tightening, and concerns about the US 10 year bond rate rising above 3%, which subsequently came to pass, spiking to 3.24% in November. As a result, this helped to spoil the equity bull market which had been built in part on the prolonged era of QE, low rates and easy money, with the US market taking a tumble in the 4^th quarter, aided of course by Trump's arm wrestle with China's President (for life) Xi.

Fast forward and new Fed chair Jerome Powell reversed tightening expectations overnight, and with the US 10 year bond rate having fallen to 2.7%, once again making equities attractive on a relative yield and risk basis - as a comparison the dividend yield on the S&P500 last year was less than 2%, although the risk remains.