Everyone is sick of the superannuation industry groups, says Minister for Revenue and Financial Services Kelly O’Dwyer.
Minister O’Dwyer was asked on 2GB if the recently released draft Productivity Commission report into alternative models for setting default super funds was broader than industry vs retail funds.
“Well exactly right, and I think everyone is frankly really sick of industry groups, and by that I’m talking about superannuation industry broadly, fighting one another about their own vested interests,” answered Minister O’Dywer.
The Financial Services Council – which represents retail funds, amongst other parties – welcomed the report, which was criticised by Industry Super Australia and AIST.
“Frankly, everybody should be interested in the members’ interest, because at the end of the day, it is their money that has been set aside for their retirement income into the future, they’re deferring their wages today and we need to get the very, very best outcome for them,” O’Dwyer said.
“That’s why the Murray Financial System Inquiry, which was the inquiry that we did straight after coming in to election in 2013, it recommended that we conduct this independent review of the superannuation system to see if it was as efficient and as effective as it could be, and whether it was delivering the right outcomes for members. And so the Productivity Commission, as you have rightly pointed out, has said there are some problems with the system as it exists today, because the default model that exists today with default funds can actually reduce a retirees’ balance by around about $25,000 on average.”
Minister O’Dwyer said the inefficiencies usually start early on when people first get a superannuation fund, raising the inability to consolidate super funds when they are set by Enterprise Bargaining Agreements.
It is Government policy to expand choice of super funds, but the legislation has yet to be re-introduced to Parliament.
“It’s not about pitting one part of the superannuation industry against the other. It’s about making sure that people get the very best value for money,” said Minister O’Dwyer.