Government ruling out changes from Review of Retirement Income System

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The Government is already ruling out changes from the Review of the Retirement Income System, including on superannuation and the Age Pension.

Late last week the Government released the Terms of Reference for the Review of Retirement Income, the first holistic review of the retirement system since compulsory superannuation. But some potential changes stemming from the review have already been ruled out.

So far the Government has ruled out increasing the Age Pension age, including the family home in the pension assets test, and further delays to the legislated increases to the Super Guarantee rate.

The Retirement Income Review has been criticised as potentially being a ‘stalking horse’ for a freeze to increases in the SG rate – something that the Coalition did in the past, and which a number of backbenchers support happening again.

The Treasurer was asked if he could guarantee that the SG rate would rise in 2021.

“Well, the Prime Minister and I have already commented on that. Our position hasn’t changed. It’s legislated and we continue to support that,” Frydenberg answered.

During Parliamentary Question Time in July, Treasurer Frydenberg ruled out changes to the legislated timetable for a 12% SG rate. Though the Prime Minister would only says that “there’s no change to the Government’s policy”.

On Friday the Treasurer said the Retirement Income Review was a “ recommendation of the Productivity Commission, which the Government has accepted to do this review”. The Commission had recommended a review, which it said should be completed before any increase in the SG rate. The Government has yet to fully respond to the Productivity Commission report, despite having it since December last year.

Frydenberg was also asked if increasing the Age Pension age to 70 – a Coalition policy only officially dropped last year – was back on the cards, answering:

“No, it’s not. What we’re focusing on is, again, developing an evidence-based approach to future policy decision.”

Asked again if the pension age would go to 70, he said: “We haven’t changed our position. Our position still remains.”

On including the family home in the Age Pension assets test, the Treasurer said it “will never be part of our policy”.

The Government has ruled out the changes despite the fact that the Review will not be making recommendations, instead it will “establish a fact base”.

Frydenberg said the Review will “be very important in helping to determine future policy positions by creating a fact base of what is happening in the system, particularly as we have an ageing population, people are living longer and our superannuation pool is growing dramatically over time”.

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