Parliamentary election timeline
The Government’s parliamentary sitting calendar for 2019:
- 12 – 14 February is the first sitting week of the new year and the only sitting week of the Senate prior to the Federal Budget
- 2 – 4 April is the Federal Budget sitting week (brought forward from May), with the Budget to be delivered on Tuesday 2 April
- Either 11 or 18 May are considered the most likely dates for the election, with 18 May the latest possible date to hold a standard general election with all Lower House seats and half of the seats in the Senate turning over
- It is increasingly likely that the Government will call an election soon after the Budget and ask the Governor-General to prorogue the Parliament. At least 33 days must pass from the dissolution of Parliament and polling day.
In 2016 the Government made substantive changes in the Federal Budget designed to make the superannuation system more equitable and sustainable. They have indicated that they don’t intend to tinker with these settings. Their key policy objectives currently reflected in legislation before Parliament are:
- major reforms to insurance and fees within superannuation and consolidation of low-balance, inactive accounts
- strengthen APRA’s powers in relation to RSE licensees and introduce an annual ‘member outcomes’ test for MySuper products
- provide that employees under workplace determinations or enterprise agreements made on or after 1 July 2018 have the right to choose their superannuation fund
- strengthen the SG compliance regime and provide for a one-off 12-month amnesty for unpaid SG
- introduce new means testing rules for lifetime retirement income stream products and further develop the CIPR regime.
When Parliament resumes on 12 February, prior to the election there will be a limited time for Government to pass the legislation necessary to implement some of these major reforms. These Bills include the Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018, Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Bill 2017, Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017, Treasury Laws Amendment (2018 Measures No 4) Bill 2018, Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2018 and Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Bill 2018.
For further details refer to this month’s rules & regs.
Following the calling of the election, the Bills will lapse if they have not been passed. It will be a matter for a returned Coalition Government or an incoming Labor Government whether the Bills are reintroduced and in what format.
Women’s Economic security statement
In November, the Hon Kelly O’Dwyer MP released the Government’s Women’s Economic Security Statement 2018, announcing the following measures relating to superannuation:
- extending early release of superannuation for victims of domestic and family violence
- improving the visibility of superannuation assets in family law proceedings
Productivity Commission and Royal Commission
The final Productivity Commission (PC) report was released on 10 January following a three-year inquiry into the efficiency and competitiveness of the superannuation system. The Government’s response to the Productivity Commission and Royal Commission (RC) will be announced after the release of the RC’s final report on 1 February. This will form a critical component of the Government’s election platform in relation to superannuation.
Labor has articulated several superannuation policies that they will take to the Federal election. Some of these include:
- taxation and contribution measures
- tax income in retirement over a $75,000 threshold
- impose a 30 per cent tax on contributions for individuals with incomes in excess of $200,000
- remove the ability to make concessional catch-up contributions over the following five years for those with balances under $500,000
- reduce from $100,000 to $75,000 the annual cap on non-concessional contributions that could be made by an individual, with a maximum three-year carry forward of $225,000
- abolish the tax deductibility of personal contributions
- remove cash refunds for imputation credits
- proceed to increase SG to 12 per cent as soon as practicable – eventually getting to 15 per cent
- greater recourse to prosecute recalcitrant employers who do not meet their SG obligations
- embed superannuation as an industrial entitlement
- take superannuation out of the budget cycle, with a council of custodians to look after super policy with a long term view to retirement policy
Women’s SUPER Security Statement
The Opposition has recommended the following measures be taken to help women build their superannuation:
- remove the $450 per month earnings threshold for SG
- include superannuation on paid parental leave
- ability to pay extra superannuation to women without breaching anti-discrimination laws
Productivity Commission and royal commission
Labor has expressed concern about the Productivity Commission’s top 10 ‘best in show’ reccommendation, noting that current high performing funds may not necessarily remain so in future years, and that limiting the market may detrimentally impact competition.
It is expected they will release their response to the final report of the Royal Commission shortly after its release.
What’s the verdict?
While we eagerly await the final suite of superannuation election policies from both sides of politics, there appears to be agreement on the need to lift the bar for MySuper products, reduce account proliferation and deliver even stronger retirement outcomes for fund members.