The government "must do better" when it comes to the proposed legislation that will enshrine the objective of superannuation in law, says Industry Super Australia.
Speaking before the Economics Legislation Committee on Monday, 6 February, Industry Super Australia director of public affairs Matthew Linden said the industry body supported the concept of enshrining the objective of super in legislation, but that the current bill had a number of critical flaws.
"At the outset, I would like to state that legislating an objective for the superannuation system has a good deal of merit, this is acknowledged broadly across the industry, however, the bill before the committee today is seriously deficient and one which we cannot offer support for," he said.
Mr Linden said the bill falls short in five key areas; it doesn’t reflect the basis on which the system was built, it doesn’t have the consensus support recommended by the Murray review, it’s not compatible with the Superannuation Industry Supervision Act, it leaves secondary objectives of the system open to government interference and it is too vague to offer guidance on policy.
"Senators, we must do better than this. Millions of Australians are depending on the system to ensure they can achieve a dignified retirement, with enough financial resources to enable them to have a reasonable degree of social and economic interaction with their communities, families and friends.
"This is not an excessive or lavish ask; it is what people expect and what the system should aim to deliver," he said.
Mr Linden’s comments were similar to remarks made by the Financial Services Council, the Association of Superannuation Funds Australia and the Australian Institute of Superannuation Trustees.
However, Grattan Institute chief executive John Daley disagreed.
"As is, I hope, clear from our submission, we support the bill as drafted and in particular that the purpose of superannuation should be to provide income and retirement to substitute or supplement the age pension," Mr Daley said.
Additionally, Mr Daley noted that many of the submissions made with regard to the current bill came from “those who represent the superannuation industry or those who work for them” and the opposition from these groups was to be expected.
"It is not surprising that a bill which says that super is in fact not the centre of the universe is not meeting with their approval, but, if we are to hold up a bill simply because it does not serve the vested interests of the superannuation industry, then I would suggest that our system is fundamentally broken," he said.
"The system has to think, 'What is in the best interests of Australians?' rather than, 'What is in the best interests of the superannuation industry?' Consequently, we think that the bill as drafted should receive the support of the Senate."
The committee is to report to the Senate regarding the objectives of superannuation bill on 14 February 2017.