14 January 2017
Super needs value adding, not ad hoc reviews and reform
The superannuation industry needs time to breathe and re-energise after a raft of legislative reform and multiple reviews and enquiries in recent years, according to the Association of Superannuation Funds of Australia (ASFA).
ASFA CEO Dr Martin Fahy said consumer focused innovation and use of technology could only develop at pace if the industry was provided with an opportunity for some clear air.
“Over the past decade, we have been inundated with legislative change. Major regulatory reforms have imposed significant implementation and ongoing costs on the industry,” he said.
“In addition, every federal budget in recent memory has included superannuation reform and this diverts the industry’s energy and resources into adapting to those changes.
“Constant change and increased complexity undermines consumer confidence in the super system. The community expects a stable system free from constant political tinkering. Australians spend their working lifetime contributing their income to a compulsory system and deserve to be financially confident in retirement.
“In circumstances where the lion’s share of funds, time and resource is dedicated to implementing regulatory change, members will inevitably miss out on improved efficiency and service and no stakeholder can be satisfied with this outcome.
“The recent budget changes mean the system is now reasonably equitable and sustainable and there should be no further need to tinker with it.
“With greater stability in settings, there will be greater confidence in super and that will result in higher voluntary contributions and improved long-term outcomes for super savers.”
Dr Fahy said many Australians were now retiring with significant superannuation balances.
“Many singles and couples who are recent retirees from the paid labour force and have reached the qualifying age for the age pension will have assets sufficient to be affected by the assets test for the age pension,” he said.
“ASFA recommends no further adverse changes be made to superannuation tax provisions or to the age pension without a holistic review being undertaken in the context of scheduled Inter-Generational Reviews, with the next review due in 2020.
“The costs of health and aged care are increasing due to the ageing population, which will result in greater pressure for individuals to fund their own expenses, as the costs of provision of these services by government rise.
“The super industry now needs space to focus on responding to shifting demographics, the changing needs of members and develop its capacity for technological excellence.”
In a survey commissioned by ASFA last year, nearly half the 1,000 respondents believed the government makes too many changes to super rules and about a quarter said recent changes had reduced their confidence in super.
For further information, please contact:
Teresa Mullan, Media Manager, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system so people can live in retirement with increasing prosperity. We focus on the issues that affect the entire superannuation system and represent more than 90 per cent of the 14.8 million Australians with superannuation.