Government seeks to implement two Royal Commission recommendations

Nest egg, superannuaiton, SMSF, retirement
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The Government wishes to implement two recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry by amending some of its superannuation legislation in the Senate.

The changes are being made to a Bill, the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017, that could seemingly pass easily as it has the support of the Coalition and the Labor Party, the yet hasn’t been debated in over a year.

Update: The Bill has passed the Senate, but now needs to go to the House.

Treasurer Josh Frydenberg announced that the Government had tabled amendments to enact two of the recommendation from the Banking Royal Commission, “enhancing accountability of superannuation funds and strengthening protections for consumers”.

These are that a breach of super fund trustee or director covenants or obligations should be punishable by civil penalties and that super fund trustees be prohibited from offering employers inducements to select the fund as a default fund for their employees.

Related: Be ‘very wary’ of inducements to switch default super fund, says ASIC

The amendment also extends the annual outcomes assessment to Choice superannuation products, as the Government announced in November last year. As the Bill was originally drafted the new obligation only applied to MySuper products. Labor already has proposed an amendment to the Bill to extend the additional obligations to Choice products.

Treasurer Josh Frydenberg called on the Opposition to support “the amendment which acts on two of Commissioner Hayne’s recommendations and would immediately enhance accountability of superannuation funds and strengthen protections for consumers”.

But Labor Shadow Treasurer Chris Bowen says the ALP does support the Bill, and will support the amendments, and that “the Government already know this – we’ve told them this repeatedly”.

He accused the Liberal Party of being “dysfunctional” and delaying superannuation reforms.

“If the Liberals ever bother bring the Member Outcomes 1 Bill on for a vote, Labor will move amendments to crack down further on rorts and rip-offs in the superannuation sector,” he said.

The last time the Bill was debated in the Senate was in December 2017.

Mr Bowen went on to say: “Our amendments will force choice superannuation funds to report on their performance like MySuper products. Millions of Australians are being ripped off by underperforming accounts and it is critical that these funds are forced to report on their performance and lift their game. Labor’s technical amendments will significantly strengthen the outcomes test.”

He called on the Government to support Labor’s amendments.

“There are a number of important reforms to superannuation before the Parliament, but the Liberals refuse to bring these bills on for a vote. They are at best hopelessly incompetent and at worst playing political games with the retirement incomes of millions of Australians.”

“To Josh Frydenberg, we continue to repeat the same message: bring these bills on for a vote. We’re ready. Are you?”

Only five Senate sitting days are scheduled for 2019 before an expected May election.

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