The coalition has challenged the federal government to back its own MySuper policy and take a sledgehammer to the default funds clause under the current modern awards system, which it claims is highly prejudicial toward industry funds.
If it fails to do so, the coalition has vowed to make the necessary changes as part of its superannuation policy if it forms government at the next election.
Speaking with Investor Weekly, opposition assistant treasury spokesman Mathias Cormann laid down the gauntlet to the government, challenging new Assistant Treasurer Mark Arbib and his predecessor, the new Workplace Relations Minister, Bill Shorten, in light of the MySuper changes, to reform the modern awards system to make it more competitive.
"Clearly, once the government has legislated the minimum requirements for a MySuper product, any product which complies with those requirements should be able to compete openly for selection as a default superannuation fund," Cormann said.
"There would be absolutely no justification for the current closed-shop, anti-competitive arrangements through Fair Work Australia, clearly favouring industry super funds, to continue."
He went on to describe the current process for the selection of default superannuation funds under modern awards as "a national disgrace".
"The current anti-competitive, closed-shop arrangements, inappropriately favouring union-dominated industry super funds, should have been fixed up a long time ago," he said.
"[Shorten] has been rewarded with a promotion to the workplace relations portfolio; he leaves the superannuation portfolio having failed to fix this issue up, even though the Labor Party promised before the last election that they would get the Productivity Commission to design a process that is open, transparent and competitive."
Shorten, who is also Financial Services and Superannuation Minister, would not be drawn on the coalition's challenge to reform the modern awards system as it pertains to default funds.
However, a spokesperson for Shorten told Investor Weekly: "The government has previously announced a review into default funds and awards by the Productivity Commission. More detail about that review will be announced in due course."
When challenged on what the coalition would do with regard to the modern awards system if elected, Cormann was clear that it would institute immediate reforms.
"If Labor has still not sorted this out by the time we get back into government, the coalition will move immediately to open the default superannuation system to competition and choice," he said.
"Competition and choice in the default superannuation market is in the public interest. To maximise value for people with superannuation we need the most open, transparent, efficient and competitive superannuation system possible."
