It is unlikely that an objective for superannuation will be legislated before the end of 2016.
The Superannuation (Objective) Bill 2016 has been referred to the Senate Standing Committee on Economics for an inquiry. The inquiry is due to report by 14 February 2017.
This contrasts to the inquiry, by the same committee, into the Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 – which includes many of the superannuation measures announced in the 2016 Budget. This inquiry is due to report by 23 November 2016, after which the Parliament has five more sitting days scheduled before the end of the year.
A legislative objective for the superannuation system was a recommendation of the Financial System Inquiry (FSI) final report, which was released in December 2014. Since then the wording of the objective has been through several rounds of consultation, but has changed little. This is despite calls to broaden the objective to include ‘adequacy’.
“During the process there were, of course, areas of general agreement on the wording of the objective. For instance, that the primary objective should be concise and supported by subsidiary objectives,” said Kelly O’Dwyer, Minister for Revenue and Financial Services, in an address to the ASFA Conference 2016.
“However, some stakeholders wanted the objective to go further — to include concepts like ‘adequacy’ or ‘comfort’ in retirement.”
“This included ASFA, and I understand and appreciate that view. But as David Murray, who headed the FSI, recently said, to include these very subjective words would “open the way to constant political interference”.”
“Moreover, the Government is acutely aware that there is no consensus on how concepts such as ‘adequacy’, ‘comfort’ or ‘dignified’ are understood, let alone measured.”
“That is why the Government has ultimately decided that a simple, unambiguous objective, without subjective concepts, is the best path forward whilst noting how important some of these other concepts are in the Bill’s explanatory materials.”
Submissions to the Senate inquiry on the Bill close on 31 December 2016.