In this edition:
Research and submissions
ASFA provided a submission in response to Treasury’s consultation on the Discussion Paper Access to offenders’ superannuation for victims and survivors of child sexual abuse (Discussion Paper). The submission was supportive of the proposal to allow victims and survivors of child sexual abuse access to their offender’s’ superannuation to satisfy unpaid compensation orders, as they consider that they achieve the right balance between competing public policy interests.
ASFA provided a submission to Treasury in response to the consultation paper on climate-related financial disclosure. ASFA supports the adoption by Australia of international standards for climate-related financial disclosure, which will help facilitate the transition to a low-carbon economy however acknowledges that the international process to develop the disclosure standards is still in its early stages.
ASFA also provided a submission in response to Treasury’s Consultation Paper Non-arm’s length expense (NALE) rules for superannuation funds. In the submission ASFA supported the proposed carve-out from the provisions in relation to ‘general expenses’ incurred by large APRA-regulated funds and called for the exemption to also apply to specific expenses.
International policy update
A new ASFA Research Note compares the cost of retirement income systems in OECD economies, finding that while many other countries face politically-difficult reforms to improve sustainability, Australia’s system is well placed.
South Korea is facing acute population ageing over coming decades, which is projected to lead to a sharp rise in government spending on pensions. Under Korea’s National Pension Scheme (NPS), a government investment fund generates inflows from worker contributions and investment earnings, and makes payments (outflows) to retirees. Under current settings, the South Korean Government projects that outflows will exceed inflows from around 2040. By 2055, it is projected that the fund will be depleted – at which point, pension payments would be funded from the budget.
The French Government has announced proposed changes to the state pension, gradually increasing the retirement age by three months each year, from age 62 to 64 by 2030. It also proposes to increase the minimum pension for low-income workers who had a full career to 85% of the net minimum wage. These changes are set against a forecast of rising system costs, with the number of French workers to retirees projected to fall from 1.7 in 2020 to 1.2 in 2070 and French pension expenditure as a proportion of GDP amongst the highest in the EU. The reforms are scheduled to be debated in the French Parliament in coming months.
In December the UK Chancellor of the Exchequer announced a broad set of over 30 regulatory reforms, “The Edinburgh Reforms”, to drive growth and competitiveness in the financial services sector. The proposals include: the intention to repeal and replace certain EU legislation post Brexit; increasing the pace of consolidation in Defined Contribution pension schemes; improving the tax rules for REITs; consulting on reform of the VAT treatment of fund management; introducing a duty for regulators to facilitate the international competitiveness of the UK economy and its growth; consulting on the establishment of the UK Central Bank Digital Currency; and committing to publish a new green finance strategy in early 2023.
Media
ASFA’s pre-Budget submission calls for a cap on concessionally taxed superannuation benefits and a reduced income threshold for Division 293 was featured in an article in The Australian.
ASFA was quoted in an article in the Australian that was focused on the increasing trends in superannuation and how it is an indicator of the confidence that Australians have in the superannuation system.
The ASFA quoted amount needed for a comfortable retirement was quoted in The Age and The Guardian.
ASFA’s research and policy recommendation to close the gender retirement savings gap was featured in articles in News, the Financial Standard, The Guardian, The West Australian and Super Review.
ASFA’s response to the Government’s proposed $3 million cap on concessionally taxed superannuation benefits was featured in articles in Super Review.
ASFA’s average account balance numbers were quoted in an article in the Herald Sun.
Events and Learning
The ASFA team will be delivering the following learning workshops in March:
