Twelve days have passed since the federal election and the result reamins in limbo. Hanging in the balance is also a significant reform agenda for superannuation and financial services.
An overhaul of fees, including the phasing out of commissions paid to financial services, was part of the Labor government’s raft of proposed changes to the industry. Central to the reform process was finally a lift in the superannuation guarantee (SG) from 9 per cent to 12 per cent.
The coalition has already dismissed a boost in the superannuation guarantee and a ban on adviser commissions.
Despite the absence of an elected government, key industry groups are pushing ahead with the reform agenda.
FPA deputy chief Deen Sanders this week announced the association would be progressing with the reforms under the Ripoll report, labelling the move “strategic regulatory positioning”, while the Association of Financial Advisers last week launched a working group that would also look at addressing issues raised by the Ripoll report.
Although the planning sector has vowed to push forward with the proposed reforms, tackling adequacy will be a little harder in the absence of government reform.
An increase in the SG to 12 per cent has already been calculated to improve a person’s retirement by $110,000, according to a number of industry bodies, including the Association of Superannuation Funds of Australia and the Australian Institute of Superannuation Trustees.
Election promises centred on key marginal seats in New South Wales and Queensland. Subsequently policy was perceived as being captive to a narrow vision by both major political parties. Boats, debt and mining suddenly became the main planks of the overall policy agenda.
However, the election stalemate has revealed that perhaps people do not want such a narrow policy vision.
Polls have consistently shown that people want the SG to be increased and are comfortable to pay for such an increase.
President Bartlett, the United States leader in the TV series The West Wing, once said: “As government it is not our job to pander to the lowest common denominator but to raise it.”
Let’s hope a brave government can one day tackle the necessary reforms, including those of Australia’s trillion-dollar superannuation and financial services industry.
