There has been an “alarming divergence” between the political parties regarding a unified and measurable set of long-term objectives for superannuation, said Rice Warner consultant Nathan Bonarius.
Rice Warner released a research report at the Financial Services Council conference, which found there has been a $136 billion “blow-out” in the superannuation savings gap due to the current government’s decision to delay increases to the mandatory superannuation guarantee to 12 per cent.
The current retirement savings gap, assuming a retirement age of 67, is $768 billion (up from $727 billion in the previous year), according to Rice Warner.
“As the superannuation industry explores ways to solve the real savings gap, arguments for resolving the ‘policy gap’ have also intensified,” Mr Bonarius said.
The government and the Opposition should agree on measurable bi-partisan objectives against which Treasury can benchmark policy changes, he argued.
Mr Bonarius noted the Financial System Inquiry uncovered “a lack of clarity” when it comes to the objective of superannuation, with Mr Murray recommending the primary objective should be “to provide income in retirement to substitute or supplement the age pension”.
“These comments are made against an historical backdrop of policy tinkering with superannuation, and a lack of political cohesion as to the ultimate purpose of the system,” Mr Bonarius said.
“So, we have two gaps. The superannuation savings gap, which in partnership with the Financial Services Council – has been measured by Rice Warner since 2003.
“The second gap is the policy distance between the major parties, wherein sensible reform is often put aside in favour of political expediency. A good example is the current government’s reluctance to address inequity in superannuation.
“Clearly, it serves the national interest for the majority of Australians to be self-sufficient in retirement. If there were bi-partisan agreement to achieve this, we could look to consensus on raising the preservation age and simultaneously seeking to promote work for older Australians,” Mr Bonarius said.
