The Financial Services Council (FSC) has urged the four Senate crossbenchers who have come out in opposition to the government’s superannuation governance reforms to reverse their position.
Speaking in Sydney yesterday, FSC chief executive Sally Loane said the reforms – which will require industry funds to increase the number of independent directors on their boards to one third – are “moderate” and “sensible”.
“The bill is still in the Senate, it hasn’t been voted on. I would hope that the senators who opposed it would take another look at the sensible reforms that are on the table,” Ms Loane said.
Senators John Madigan, Glenn Lazarus, Jacqui Lambie and Nick Xenophon released a statement on Wednesday outlining their rejection of the Superannuation Legislation Amendment (Trustee Governance) Bill 2015, which was introduced to parliament on 17 September.
“We certainly hope that the senators have a look at this when it comes before Parliament again,” Ms Loane said.
Ms Loane indicated that stronger governance standards will significantly improve consumer protections.
“I think that’s what we have to keep sight of – this is for members, it’s for us, it’s for our mandated savings over that very long period," she said.
“Independents bring a lot of skills to a board, they bring diversity and they bring independent thought. You can prevent against conflicts of interest."
Ms Loane said that given the size of the Australian superannuation system, the laws around governance are notably weak and need to be addressed.
She also argued that the purpose of superannuation needs to be defined in legislation.
"We think that that would be very useful because if we have a purpose set out in legislation, then super wouldn’t continually be in the budget cycle and wouldn’t be continually tinkered with," she said.
Regarding superannuation tax reform, Ms Loane said it needs to be reinforced that super is not a "vehicle for intergenerational wealth transfer".
"It's actually to provide an adequate and comfortable retirement for Australians to take the pressure off the public purse," she said.
"Our view is that the tax concessions certainly do need to be on the table in this holistic review of tax. We wouldn’t like to see any savings made at the top end going out into budget revenue; we’d like to see those stay in the system."