Govt faces fight to pass YFYS legislation

The Government faces a tough fight to get its Your Future, Your Super legislation through the Parliament with the Federal Opposition Labor Party and the cross-benchers foreshadowing more than eight amendments.

Labor’s financial services spokesman, Stephen Jones foreshadowed the tough passage for the legislation and noted particular opposition to the Government’s super fund stapling proposals and the directions power which would allow the Treasurer to veto particular superannuation fund investments.

Jones said, however, that Labor’s objective was not to “sink” the legislation but to save those elements which were worthy, such as the benchmarking and performance tests which would be applied to superannuation fund.

Addressing the Conference of Major Superannuation Funds (CMSF), he said that instead of stapling members to a particular fund, the Government should accept an amendment which would see them stapled to their money – something which would allow them to switch from fund to fund throughout their careers while remaining attached to their balances.

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On the question of the Treasurer’s proposed reserve power, Jones said the measure was highly problematic which would make Josh Frydenberg the “superannuation trustee in chief”.

“It is kryptonite for investment certainty,” he said. “It is unfathomable that coalition members would allow this to sail through their party through untouched.”

In doing so, Jones said that if another party were in power, the same reserve powers could be used to “hit the kill switch on investment in a coal mine”.

He said that in future it would be very difficult for the Australian business community to reference sovereign risk if it failed to express its concerns about the reserve powers and what it handed to the Treasurer.