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A funny thing happened on the way to the forum
Superannuation issues may have dominated political discussion in the early months of 2013, but there will be few industry forums at which to discuss the major issues before the 14 September Federal Election.
The Australian Institute of Superannuation Trustees (AIST) is again hosting the Conference of Major Superannuation Funds (CMSF) this month and it is a great pity that, in an election year, it is a virtual politician-free zone.
It takes many months to develop the program for a conference such as CMSF, and as 2012 came to a close the organisers would have had little inkling that the Prime Minister, Julia Gillard, would start the political year by announcing the election would be held on 14 September.
They could also not be expected to know that superannuation would be front and centre of the early election debate.
Gillard placed superannuation on the election debate agenda when she canvassed further changes to the superannuation tax regime, particularly as it applied to upper income earners.
Thus it is not only a matter of election debate: it will also be a key item to watch when the Treasurer, Wayne Swan, hands down what is likely to be his final Budget on 14 May.
However, whether CMSF 2013 traverses the politics of superannuation or not, the Super Review roundtable published in this edition has served to underscore the degree to which the Prime Minister’s speculation around superannuation policy has served to further alienate significant segments of the superannuation industry.
The reality, of course, is that the superannuation industry has had to endure tinkering with respect to superannuation policy at every Budget since the Labor Party was returned to office in 2007, impacting a range of retirement income incentives from contributions caps through to the co-contribution arrangements and excess contributions.
Given the state of the Budget and the impact of the global financial crisis, some of the changes with respect to the co-contributions were explicable in terms of the Government cutting back on some of the perceived excesses of the Howard Government.
However, the Prime Minister’s latter day flirtation with super taxation changes owes more to political expediency than long-term policy benefit.
The Government may paint its proposed changes any way it likes, but few in the superannuation industry would argue that the administration is not prepared to once again milk the superannuation milch cow to help bolster a pre-election Budget.
Its tampering with the superannuation tax settings less than four months out from a Federal Election appears even more politically expedient when weighed against the abandonment of the promise to deliver a Budget surplus this year and the failure of the Mineral Resources Rent Tax.
There is much to recommend the calls by the Financial Services Council and other groups for the major political parties to develop a bipartisan approach to superannuation, and such an approach should clearly be based on a thorough examination of the current state of the industry and Australia’s broader economic objectives over at least a two-decade time-frame.
Lost in the short-term political discussion around reducing the superannuation tax concessions for higher income earners is the original objective of the superannuation system put in place by former Treasurer, Paul Keating and supported by former Australian Council of Trade Unions secretary Bill Kelty.
Lost, too, are the undeniable truths contained in successive Treasury intergenerational reports recognising the need for superannuation savings to not only alleviate pressure on the age pension but on health care expenditures and other major Government outlays.
Notwithstanding the solid research which underpinned the intergenerational reports, it has been generally accepted that there have been those within the Federal Treasury who have been pursuing an agenda when arguing that the tax concessions delivered to superannuation cannot be justified.
However, as recent analysis by the Association of Superannuation Funds of Australia (ASFA) has shown, strong doubts exist about these arguments from within Treasury because they are based on inappropriate statistical criteria.
While many delegates to last year’s CMSF event rightly praised the organisers for keeping it a politician-free zone, there will be those attending this year who may lament the absence of the Minister for Financial Services and Superannuation, Bill Shorten, or his Coalition counterpart, Senator Mathias Cormann.
The reality for the superannuation industry is that the timing of the election means there will be few similar events at which to either listen to or question the politicians at the centre of the debate.
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