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”.