Criticism that superannuation and insurance is to be including in the Royal Commission into Misconduct in the Bank, Superannuation and Financial Services Industry is “misguided and unwarranted”, says Minister for Revenue and Financial Services Kelly O’Dwyer.
The industry super sector in particular has been critical of including superannuation in the Royal Commission. It has also been suggested the Government is trying to deflect attention from the banks to super funds.
“The APRA regulated superannuation sector is worth more than $1.6 trillion and is structurally significant within the Australian economy. It would have been absurd if we had not included superannuation and insurance in the terms of reference for the Royal Commission,” said Minister O’Dwyer.
“There is no compelling case to carve out superannuation from this inquiry – especially given that the superannuation system operates under a compulsory model where people are forced to put 9.5 per cent of their wages away until retirement.”
“Previous calls for a Royal Commission by both the Labor Party and by the Greens had also called for superannuation to be included in a banking inquiry, but now we have hysterical fear-mongering from industry funds and from the trade unions demanding that they receive special treatment and be excluded from the Royal Commission.”
The draft Terms of Reference in respect of superannuation is limited, only requiring the Royal Commission to inquire into “the use by a financial services entity of superannuation members’ retirement savings for any purpose that does not meet community standards and expectations or is otherwise not in the best interest of member”.
Update: the Letters Patent for the Royal Commission have been signed . There are some changes from the draft Terms of Reference, but there has not been an expansion in terms of superannuation.
Minister O’Dwyer said the reaction to this inclusion of super in the Royal Commission was an attempt to “distract and deflect” from the benefits of the Government’s superannuation agenda, some of which is being debated in the Senate today.
“Any part of Australia’s financial services sector with nothing to hide will have nothing to fear from a Royal Commission or the Turnbull Government’s superannuation reforms,” said Minister O’Dwyer.
“Superannuation members will have much to gain in confidence through a system which is transparent, accountable, with independent oversight and a strong prudential regulator.”