Despite the superannuation industry’s lobbying efforts, fatigue ultimately led to the failure of the federal government to set the objective of super in stone, according to the SMSF Association.
When asked during a panel discussion today at the SMSF Association National Conference 2019 what had happened to the process, association head of policy Jordan George said: “It was, in a word, fatigue. That idea got thrown around and bandied around about how best to implement it to the point where I think between industry and government, the government got worn down in actually trying to land on the right objective.”
George said all segments of the super sector, including industry funds, retail funds and SMSFs, had reached agreement that the definition of the objective of super had to encompass more than just supplementing or substituting the age pension.
“But it fell down because the government and Treasury would not commit to having adequacy as part of the objective,” he said at the conference in Melbourne.
“So very much from an industry perspective we all agreed that there had to be some reference to adequacy in the objective, whether it was in the primary objective or sub-objective, to support it.”
The government was of the opinion that if the concept of adequacy was applied to super, then that concept would require uniform application across social security programs such as the age pension and Newstart, he said.
“I think we had numerous goes at trying to come to an agreement with the government to the point where they introduced legislation to parliament, but there was never true support for whether there would ever be an objective,” he noted.
His comments came in response to observations posed by SMSF Association chair and panel moderator Professor Deborah Ralston that the 2014 Financial System Inquiry recommended the enshrinement of the objective of super, but there had been no progress in this respect.
The panel noted that with policymakers navigating how to implement the royal commission and Productivity Commission recommendations, an objective for superannuation would be of helpin guiding them through their attempts to implement the measures, while driving effective policy in anticipation of these legislative recommendations.
BT Financial Group chief executive Brad Cooper said not only does the super sector have to take the lead on the issue, but also there needs to be a bipartisan political approach to it.
“One way to do that is by getting it out of the budget and getting it into a five-year review [time frame] post the ‘Intergenerational Report’, so you can actually have a sensible review of how it is going now against those measures,” Cooper said.