In a statement released on Thursday, ASFA said the new discussion paper released by senator Andrew Bragg, which outlined a proposal to nationalise default worker savings in the super system into a government-run investment fund, was “facile” and at odds with concerns raised by Liberal colleague Tim Wilson around concentration of ownership in financial markets.
“This illiberal idea is inconsistent with the recently announced House of Representatives inquiry into concentration and common ownership in the Australian share market and would exacerbate the very issues which are the apparent cause of concern for this inquiry,” ASFA chief executive Martin Fahy said.
“Moreover, the industry is still in the process of implementing the latest round of major reforms which were legislated only last month, so creating further confusion for Australians right now is perplexing, particularly given the strong performance of superannuation funds over the past year.”
Fairfax Media reported on Thursday that Senator Bragg’s proposal would see new entrants to the workforce, and workers in underperforming funds, entered on an opt-out basis into a government-run fund called Super Guarantee Australia.
Senator Bragg proposed the fund would be run by public sector super fund the Commonwealth Superannuation Corporation.
ASFA said the idea of nationalising super had been rejected previously by former finance minister and current OECD head Mathias Cormann.
“Putting the precious retirement savings of Australian workers into a nationalised entity raises the spectre that down the road we could see the fund raided for pet projects and political interference in its investment decisions,” Mr Fahy said.
“Defaulting people into a government-controlled superannuation fund will lead to the moral hazard of superannuants expecting the government to underwrite their retirement outcomes and pick up the bill for any underperformance or losses in the long-term.”