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Government lacking vision for superannuation
If one thing appears to have defined the efforts of the Gillard Government on superannuation it is a lack of vision – the type of vision exhibited by the former Prime Minister and Treasurer, Paul Keating, at the recent ASFA Conference.
It took the former Prime Minister and Treasurer, Paul Keating, to place the superannuation record of the current Labor Government in context.
Addressing the opening plenary of last month’s Association of Superannuation Funds of Australia (ASFA) national conference in Sydney, Keating placed the Gillard Government’s superannuation agenda in context by pointing to both the past and the future – the evolution of a super system based on the superannuation guarantee, and a future based on recognising and dealing with Australia’s longevity issues.
It is worth noting that at much the same time that Keating was outlining his views to the ASFA conference, the Parliament was dealing with the final bits and pieces of the prolonged process which has been the Government’s Stronger Super package.
It is also worth noting that just a couple of days prior to Keating’s address, a Super Review roundtable identified the myriad loose ends and unknowns that still attach to the Government’s super changes.
What Keating essentially did was declare that the superannuation system he helped build back in the 1980s had, hardly surprisingly, not kept pace with Australia’s dynamically changing demographics – and that it now needed to evolve to take account of the nation’s longevity issues.
In particular, Keating pointed to the need for the development of a system which makes the taking of lump sums less attractive and specifically assists Australians to fund the latter part of their retirement years – those beyond the age of 85.
The difference between what Keating had to say and the Government legislation which passed the House of Representatives is that one reflected a long-term vision for the growth and relevance of the Australian superannuation system, the other represented mere tinkering.
It is also worth noting that Keating spoke somewhat derisively of the Government’s decisions to successively reduce the concessional contributions caps in pursuit of a Budget surplus.
The former Prime Minister and Treasurer suggested that this reflected a lack of attention to the implications for the outlying years and outlying budgets.
As the Australian superannuation industry closes out 2012 it does so knowing that it must not only accommodate all the changes being forced by a combination of Stronger Super and the Government’s approach to default funds under modern awards, but also do so in the context of a looming Federal Election.
There are some who believe that as its promised surplus becomes less and less achievable the Government may choose to go to the polls before the May Budget.
If this is the case, then the super industry will also need to take account of the likelihood of a change of Government and therefore a change in super policy.
Though no one in the superannuation industry makes it terribly obvious, they are already progressing towards their obligations in 2013 with an eye towards two different scenarios – the full implementation of Stronger Super, or Stronger Super amended to take account of Coalition policy.
However anyone in the superannuation industry who believes a Coalition Government will move quickly to make major changes, including lifting the concessional contribution caps, should moderate their expectations. All Coalition policy decisions will be framed around the perceived size of the deficit.
Given that 2013/14 now appear likely to be years of relative uncertainty with respect to superannuation policy, it is to be hoped that, thereafter, the tinkering can be put aside and some Keating-like vision can be applied to policy development.
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