Superannuation peak body ASFA welcomes the government’s consultations on draft consumer protection and Compensation Scheme of Last Resort (CSLR) reforms.
The recommendations to be explored by Minister for Financial Services Dr Daniel Mulino address two interconnected problems: the conduct that has left consumers exposed to significant losses from certain financial services products, and the explosion of the cost of the CSLR.
Unsustainable cost expansion under the CSLR’s current design led to 18 million super fund members having to help fund the compensation scheme, from which they can never claim.
“Ensuring consumers experience fewer losses in the first place is the most effective way to stop the CSLR’s costs spiralling out of control,” said ASFA CEO Mary Delahunty.
“Unregulated lead generators, aggressive sales tactics, and conflicted financial advice have caused real consumer harm. Better licensing, more time for funds to check the safety of transactions, and stronger advertising frameworks will be much-needed guardrails.
“The vast majority of Australians have their super savings in a safe, tightly regulated system. But today’s announcements address activity on the edges of this safety zone. We welcome protective barriers where we can see warning signs of danger to consumers’ financial wellbeing.
“Prevention is better than compensation. The recommendations released today will go a long way towards reducing those claims in the first place,” Ms Delahunty said.
The consultations also include proposals to review the CSLR’s funding arrangements and its role as a true last-resort mechanism. ASFA welcomes this as a step towards a fairer outcome for the millions of super fund members who contribute to the scheme but cannot claim from it.
“These are substantial proposals that could make consumers meaningfully safer and put the CSLR on a more sustainable footing. The detail will matter, and we look forward to consulting with government on behalf of the superannuation sector over the coming months,” Ms Delahunty said.
For further information, please contact:
Scott Roberts
ASFA Media Lead
mediaunit@superannuation.asn.au
About the Association of Superannuation Funds of Australia (ASFA)
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry, and the only industry body that represents all parts of the APRA-regulated system.
Our more than 100 members include retail, industry, corporate and public sector funds and their service providers. For over sixty years, ASFA has been the voice of super, advocating for a dignified retirement for all Australians. Through research, advocacy and collaboration, ASFA promotes efficiency, sustainability and trust in Australia’s world-class retirement income system.