Operating the superannuation system without an overarching objective and purpose for the past 30 years has been reckless and has led to the current situation where many people will still be reliant on a pension, a Liberal senator has argued.
New South Wales Liberal Senator Andrew Bragg said while the superannuation system was a good idea, it has never had a clear framework despite efforts to put one in place, including, most recently, a recommendation from the Financial Services Inquiry chaired by David Murray.
“It is a great shame that the idea of the Murray inquiry to legislate an objective has not been addressed,” Bragg said as part of a recent Financial Services Council webinar.
“We must have a clear objective, which is to reduce future costs to taxpayers and improve lives in retirement. This is what I would have as it needs to be clear and simple and something we can pursue into the future.
“Running a scheme that is a serious attempt at intergenerational policy, without an objective, for 30 years is quite reckless, and I am not surprised where we are with the scheme.”
Despite 30 years of compulsory superannuation, he said he remained concerned about the high level of reliance on the pension and this was unlikely to change for many years.
“We should be thinking about the best deal for taxpayers today and in the future. I do worry that we have not got more people off the pension and that 70 per cent of people will still rely on the pension and the number won’t change until 2050,” he said.
“The cost to the national budget is enormous. It is $36 billion this year to forgone tax revenue and we want a scheme to save and not cost money.”
In the same webinar, Bragg called for an industry-wide campaign to promote actual retirement outcomes from current super contribution models and noted that SMSFs had avoided most of the issues raised around retail and industry funds at the 2018 Hayne Royal Commission.
