Treasury has recognised the value of the consultation process associated with enshrining the objective of superannuation into law, revealing it uncovered pervading industry sentiment and allowed the government agency to understand a misconception regarding the measure.
“The one clear [message] we got from the consultations is [the stakeholders] wanted an accountability mechanism. That was really one of the key messages for me,” Treasury retirement income policy division first assistant secretary Lynn Kelly told delegates at The Tax Institute National Superannuation Conference held in Melbourne recently.
Kelly acknowledged the industry’s interpretation of the proposed objective of superannuation wording was a surprise, especially in the way it differed from Treasury’s intentions.
“The other thing that I found really interesting from the consultations, and this is why you consult, is people read [meanings] into the words that we didn’t,” she revealed.
“[So] when we talked about [the concept of] sustainable for instance, we were thinking about the sustainability of the system and we were thinking about fiscal settings.
“Whereas other people [saw sustainability as] meaning pushing super funds into ESG (environmental, social and governance) investing for instance. It was something I hadn’t expected.”
According to Kelly, the wording also led to another unusual piece of feedback from industry.
“The other thing I hadn’t expected was that people would be concerned over the use of the word income. [The interpretation was] that lump sum withdrawals wouldn’t be allowed and that was just something that we hadn’t thought of at all because income can come in different forms,” she said.
“It was fascinating, but I think we addressed a lot of [those issues] with the draft EM (explanatory memorandum).”
She pointed out the consultation on the objective of super was significantly welcomed by industry participants, with Treasury receiving 150 submissions on the concept, one of the highest number of responses ever received from such an exercise, and a further 30 in response to the draft legislation released in November.
