Coalition members of a joint parliamentary committee examining the government’s two MySuper bills have called for any authorised MySuper product to be able to compete freely in the default superannuation market.
Opposition assistant treasury spokesman Mathias Cormann said the government should not use the Productivity Commission’s review into default super funds in modern awards as a delaying tactic in allowing MySuper products to compete as part of the selection process now.
“The government should not use the current Productivity Commission review – which it finally got around to asking for – as an excuse to do nothing for a year,” Senator Cormann said.
“Any authorised MySuper product complies with the consumer protection requirements enshrined in law by the government. As such, there is no need for an additional secretive and discredited process through Fair Work Australia to further determine which MySuper products should be included as default funds under various modern awards.
“The current process is not transparent, not competitive and inappropriately favours union-dominated industry super funds and should be fixed as soon as possible.
“Only with genuine competition in an efficient and transparent default superannuation market will fund returns and retirement savings for Australians in default super be maximised.”
Cormann recently praised the Productivity Commission chairman for declaring the review would be comprehensive and not limited by the government’s terms of reference.
However, he also told Investor Weekly he believed the government had taken too long to initiate action on default funds and the review only represented a delaying tactic that would result in MySuper products missing out on competing in the default fund market.
“Labor recognised that the current process was not competitive or transparent before the last election and promised this Productivity Commission review a long time ago. We think the government has had a go-slow strategy on this important and necessary reform for too long now,” he said.
“It should have long happened. The current review should not have to take the best part of 2012.”
He said he did not believe anything meaningful or lasting would come out of the review.
“Even after the Productivity Commission has finally reported, we have no confidence that Labor will then act on any recommendations and ensure an open, transparent and competitive process for the selection of default funds under modern awards,” he said.
Cormann did concede the government’s MySuper legislation had improved since its original draft, however, he stressed MySuper products should not be “left out in the cold” when it came to the default funds market.
“The latest version of MySuper proposals are a significant improvement on the government’s original approach, which would have resulted in a highly rigid one-size-fits-all default superannuation market,” he said.
“That would have been to the great disadvantage of many Australians.
“However, the government still has some way to go and must address the current anti-competitive closed-shop arrangements in default superannuation as an absolute minimum as soon as possible.”
Submissions to the Productivity Commission’s review are due today.
