The chief executive of the Financial Services Council (FSC) has urged the federal government to lift its game on Australia’s superannuation system reform, Stronger Super, and address the issue of how default funds are chosen under industrial awards.
In his address to this year’s FSC conference, John Brodgen urged the Government to send the super fund selection terms of reference to the Productivity Commission immediately.
“The government has committed to the Productivity Commission designing a process for the selection of superannuation funds by July 2012. This is too late,” he said.
“We call on the government to send the terms of reference to the Productivity Commission now for a report in early 2012. The parliament must have the Stronger Super legislation and the Productivity Commission report in front of it when it legislates.”
He said there is no use “commoditising default superannuation” in MySuper and then failing to allow full competition in awards.
“It would be an extraordinary failure of public policy if the most significant reforms to superannuation since 1992 maintained a monopoly for one section of the superannuation industry and denied the full benefits of competition to millions of Australian workers,” he said.
“It is absurd that the government’s superannuation reforms could result in just one Australian paying more for their superannuation.”
In response to comments that the government has delayed the Productivity Commission report process on Stronger Super, Parliamentary Secretary to the Treasurer, David Bradbury, said: “We could wait until every issue attached to the broader discussion occurs but the government is proceeding and progressing with the timetable that we’ve set.
“The Productivity Commission review, that will occur in good time, we’ll deal with that with an appropriate response at that point.
“I think in terms of whether or not the Productivity Commission should do this now, I’m not suggesting there is not an important issue but, equally, we’ve got to work through this process.”
Liberal senator for Tasmania David Bushby said the matter deserves immediate attention.
“It’s an important issue now, these default funds are being used under these awards now,” Bushby said.
“We need to examine that issue, as [it was highlighted by] the MTAA fund – which just last year was being added as a default award fund – whilst why we now know it was being investigated by APRA [Australian Prudential Regulation Authority].”
