Members of parliament from both major political parties are unwilling to support setting the level of the superannuation guarantee (SG) beyond 10 per cent, a Liberal politician has claimed.
Speaking during a panel session at the Financial Services Council Summit 2019 in Sydney yesterday, Liberal House of Representatives member Jason Falinski said: “It’s probably safe to say in Canberra if you get most members of parliament, regardless of what side [of the house] they sit [and] without a microphone around them, you wouldn’t find a lot of support for increasing the super guarantee much over 10 per cent.
“The reason for that is that report after report after report has demonstrated that we don’t have a system that is necessarily sufficient as it needs to be and could be.
“Despite the plethora of reports, it has proven to be one of the most intractable areas of policy to get reform and change.
“So I think a prevailing view in Canberra is that putting more money into a system that refuses to respond to consumer needs is not something most people want to buy into.”
According to Falinksi, ensuring the superannuation system remains sustainable and has the ability for individuals to self-fund their retirement goes beyond determining the appropriate level of SG contributions to be levied on employees’ earnings.
“The point is that when this system started, (then-prime minister Paul) Keating and (then-Australian Council of Trade Unions secretary Bill) Kelty really had some sort of idea what this was meant to do, the trade union movement had a different agenda as well, [so] what it has evolved into is not what it started off with and the framework we have used to run this system is clunky [and] out of date,” he said.
“The latest Productivity Commission report, which I don’t happen to agree with, but it does make a point that even supervision of that [contains] lots of cracks or gaps between ASIC (Australian Securities and Investments Commission) and APRA (Australian Prudential Regulation Authority).
“If we want to make the system sustainable, efficient, innovative, that’s the sort of stuff we need to get on top of.”
Earlier at the summit, Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume said the defined contribution superannuation system currently in place had to be efficient and work in members’ interests.