Priorities for superannuation policy post-election? Industry has some ideas

Now the election is over, what will be the Government’s superannuation policy priorities? The superannuation and financial services industry has started putting forward suggestions.

Related: Liberal superannuation policy

Policy stability supported by legislative objective

The SMSF Association has called for policy stability, supported by legislating objectives for superannuation.

Association CEO John Maroney called on the Government to give the super sector three years of policy stability.

“After the introduction of the significant legislative changes that took effect on 1 July 2017, it’s essential that members of superannuation funds can have a period of sustained stability,” he said.

“For self-managed super fund (SMSF) members, policy continuity means they can focus on managing their financial needs rather than being constantly forced to consider significant changes to their retirement plans.”

Maroney urged all political parties for focus on legislating objectives for superannuation.

Legislated objectives for superannuation was a recommendation of the Coalition’s Financial System Inquiry. The Inquiry called for the seeking of broad political agreement for the objectives, though this didn’t occur. The Coalition Government’s chosen objectives have languished in the Senate – in the Superannuation (Objective) Bill 2016 – since last being debated in November 2016. It has been unclear if legislating objectives remains Coalition policy – Ministers have not been mentioning it, and it didn’t appear in the Liberal’s superannuation policy document.

Maroney said: “Considering the recent policy landscape, including the Financial Services Royal Commission and Productivity Commission, ensuring that superannuation has a clear objective will help drive meaningful and effective policy change.

“Building a successful retirement income and superannuation system requires public confidence in the efficiency and fairness of the system and, going forward, we look forward to working with all sides of politics to continue improving the super system, particularly regarding the simplicity of superannuation legislation, so that all retirees can seek to achieve a secure and dignified retirement.”

Re-introduction of Bills

Passing the Superannuation (Objective) Bill 2016 will require it to be re-introduced to Parliament, as – like the other superannuation Bills – it lapsed with the election.

Peter Burgess, SuperConcepts General Manager Technical Services, expects many of the Coalition’s superannuation previous measures to be re-introduced, along with measures from the 2019 Budget.

Burgess highlighted the proposed changes for older people contributing to super, opting-out of Super Guarantee for high income individuals, changes to Non-Arm’s Length Income rules around expenses, and including LRBAs in Total Super Balances in some circumstances.

“With a possible outright majority in the lower house and a slightly less hostile senate, we may even see the re-emergence of the Government’s proposal to increase the maximum number of SMSF members from 4 to 6,” he said. Increasing the SMSF member cap was included in the Liberal’s policy list.

“There is also the spectre of the introduction of 3 yearly audit cycles for some SMSF, although we do expect the latter to be unlikely given the lack of support for this measure from the SMSF sector.”

Default into superannuation once

The Financial Services Council has listed default superannuation as one of its policy priorities.

FSC CEO Sally Loane said the financial services sector was looking to the newly elected Morrison Government for strong leadership, combined with a transparent policy agenda based on consultation with stakeholders.

“The Government has been given a mandate to work with the sector to restore consumer and business confidence following a challenging and difficult period.”

One of the policy priorities put forward by the FSC is a “fair and competitive default superannuation framework where individuals only default once”. This was part of the, almost three year, Productivity Commission inquiry into superannuation. The Productivity Commission website says “there has not been a government response to this inquiry yet”.

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2 thoughts on “Priorities for superannuation policy post-election? Industry has some ideas”

  1. I do not see how the government can introduce objectives or superannuation when they have the “First Home Super Saver Scheme”. How could this scheme fit with any reasonable retirement saving objective? In the past I have heard a few government ministers trying desperately trying to fit home ownership into retirement, perhaps their hearts wearn’t in it, in any case they weren’t convincing.

    1. The Superannuation (Objective) Bill 2016 only requires a ‘statement of compatibility’ for new measures, and that’s if it passes. The Coalition has been passing a number of superannuation-related Bills while the Objective Bill has sat in the Senate. For instance the First Home Super Saver Tax Bill 2017 was introduced to Parliament in September 2017 and passed in December 2017, which is more than a year after the Objective Bill was introduced.

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