The Australian Institute of Superannuation Trustees (AIST) has called for opposition to the reforms, saying that while it supports the Morrison government’s intentions, “the bill is incomplete, inconsistent, unworkable and does not achieve the policy intent articulated in the budget announcement.”
“It’s disappointing that the government completely ignored the substantial concerns raised to ensure this bill delivered on its objective,” said AIST chief executive Eva Scheerlinck.
“This is a poorly drafted bill that will deliver more consumer harm than good if passed in its current form…Australians deserve better. Our super system is one the best in the world, so any changes made must be evidence-based so that they improve member outcomes rather than worsen them.”
The AIST warned that the legislation ignores a slew of Productivity Commission recommendations, including that underperforming products be wound up before stapling occurs and that all super products be assessed, while granting the Treasurer “extraordinary power” to ban super fund investments or expenditure unilaterally.
“The legislation should not proceed. As these issues have not been addressed by the government, AIST submits that the (Senate Economics Legislation Committee) must recommend opposing the legislation in its entirety,” the AIST said in its submission on the matter.
Lobby groups previously displayed a grudging acceptance of the reforms that quickly turned to anger when they were tabled in Parliament almost entirely unaltered from their draft state after a month-long exposure process.
Meanwhile, Industry Super Australia (ISA) has accused the Morrison government of using “souped-up modelling” in the Retirement Income Review (RIR) to justify cutting or freezing the legislated increase to 12 per cent, including by assuming that everybody works 40 years uninterrupted and that their benefits are preserved until retirement.
“The Retirement Income Review adopted objectively wrong assumptions for their base case that vastly inflates retirement outcomes – the troubling conclusion is that the review was rigged to get an outcome the Government wanted,” said ISA deputy chief Matthew Linden.
“Some sensitivity analysis was undertaken which point to the problems, but this was excluded from the base case and some impacts were materially understated. Modelling based on wrong assumptions has real life ramifications, some wish to use the Retirement Income Review’s findings to cut super for millions who otherwise wouldn’t save enough for retirement.”
The Morrison government has yet to commit to a course of action on the legislated increase.
