As the peak policy, research and advocacy body for Australia’s superannuation industry, one of the ways ASFA works towards ensuring the best possible retirement outcomes for Australians is by using research and evidence to advocate for public policy settings which will improve the superannuation system.
Following is a snapshot of what the ASFA policy team is working on at the moment.
ASFA made a pre-Budget submission which contains five recommendations aimed at reinforcing public confidence in the system and stressing that the current settings are working. It also acknowledges that the pandemic has drastically and negatively affected our economy, that we are now officially in a recession. This will affect decisions about superannuation, including the way in which the Government will view the Retirement Income Review (RIR), particularly given the terms of reference were drawn up pre-COVID.
Federal Budget: 6 October 2020
This year’s Budget announced significant reforms that will have wide ranging impacts for the industry. The ‘Your Future, Your Super’ measures will be implemented over four years from 2020-21 and will staple superannuation members to an existing superannuation account. New entrants to the workforce will be able to pick a MySuper product from a new online YourSuper comparison tool, to be delivered by the ATO.
The role of the superannuation industry in supporting the Australian economy
In August we released a paper on “The role of the superannuation industry in supporting the Australian economy.” This looks at the role super has played in supporting Australians through the COVID-19 pandemic, and more importantly the role it will play in supporting Australia’s economic recovery in four ways:
- Providing funding for transport infrastructure projects, as new infrastructure investment is a key source of productivity growth in the broader economy
- Investing in energy generation and distribution assets, including renewables
- Investing in a wide range of unlisted property assets either held directly by funds or indirectly through pooled arrangements.
- Investing in a range of healthcare assets including facilities which offer direct care as well as investment in medical research and development
Improving productivity within superannuation
The superannuation system currently provides numerous broad benefits for the broader Australian population, Australian Government and the Australian economy. There are, however, a number of measures that could improve productivity and efficiency within the superannuation industry.
In consultation with our members, we have focused our efforts in advocating for six measures which we believe would make the super industry more efficient and productive post-COVID. The full report can be found here, but our six recommendations are:
- Centralise data reporting
- Change default communication medium from paper to electronic
- Make advice more accessible for members
- Make it easier for members to make a contribution and to claim a tax deduction
- Address issues related to superannuation fund mergers
- Ensure greater stability in policy settings
Retirement Income Review
In July this year the Treasurer received the Retirement Income Review (RIR) Report, but it has not been publicly released. The Treasurer originally announced a review into the retirement income system, which was a Productivity Commission recommendation, in September 2019.
The purpose of the RIR is “to establish a fact base of the current retirement income system that will improve understanding of its operation and the outcomes it is delivering for Australians.” However, it’s important to keep in mind that the terms of reference were drawn up in a different health, social and economic context.
Australia’s retirement income system impacts every single Australian. While it is important that the Government is taking the time to carefully consider the findings of the RIR report, as well as how COVID-19 may have impacted the future of Australia’s retirement system, we have called for the Government to publicly release RIR report. It is necessary for the RIR report to receive the public consideration it deserves, given the importance of the topic.
ASFA stands ready to prepare a response once the RIR report is released.