The federal coalition has not only thrown its support behind Labor’s SuperStream reforms, but has indicated it would take them further if elected to government in 2013.
Speaking exclusively to Investor Weekly, coalition assistant treasury spokesman Mathias Cormann said while there was a need to get the policy reforms on SuperStream right, there would be more reforms needed in the future.
“I don’t think we’ll ever get to a situation where further changes are not required down the track. However, if we get this right now and commit ourselves to continuous improvement moving forward, we will hopefully not have to play catch-up to the same degree down the track,” Senator Cormann said.
“The SuperStream reforms are very important and we support them.
“Government and industry must continue to work together towards achieving the most efficient, the most transparent and the most competitive superannuation system possible. Only the most efficient, transparent and competitive superannuation system will ultimately see the retirement savings of Australians maximised.”
The government is levying the super industry to pay for the $467-million SuperStream reforms over the coming years. When the levy was announced, the government said it would only represent around $4 per fund member.
However, according to recent reports, the Association of Superannuation Funds of Australia had been given estimates by its members that the cost could be as high as $60 to $80 per member for some funds.
This has prompted some players in the super industry to call on the Australian Prudential Regulation Authority (APRA) to defer collecting the levy over the first few years of operation until the true costs are better understood.
Cormann rejected this idea, indicating the coalition would support Labor’s reforms being implemented sooner rather than later.
“While there will be an upfront cost for both government and the industry, the savings which will come from significantly increased efficiencies will be worth the effort,” he said.
“In fact, an overall $1-billion upfront investment is expected to help achieve $20 billion in savings over the next decade. With appropriate competitive tensions in an appropriately transparent system that should provide significant savings and increased net investment returns for super fund members.
“I don’t think we should wait before progressing the implementation of SuperStream.”
Cormann qualified his support for the reforms, stating the only threat to the potential savings through the SuperStream reforms was poor implementation by the government.
“We have urged the government to be completely transparent about the real cost of implementation for the ATO (Australian Taxation Office) and APRA as we progress through the SuperStream implementation phase … it will be important for the government to manage the implementation of this project competently,” he said.
