Labor paper on super canvasses simpler system

The Federal Labor Party published a ‘discussion paper’ on superannuation yesterday, which canvassed a variety of changes to the super system including simplification of regulations and tougher controls.

The paper, written by Shadow Treasurer, Wayne Swan, and Opposition spokesman on super, Senator Nick Sherry, coincided with a speech by Opposition Leader, Kim Beazley, to the Conference of Major Superannuation Funds on the Gold Coast. Both Sherry and Swan also attended CMSF yesterday, where a capacity attendance of more than 1,000 meets until Wednesday afternoon. Beazley outlined six key areas for change, under a Labor government, and also signalled that Labor would be looking at the “problem” of commission selling of superannuation products. The key changes included: introduction of automatic consolidation of super fund accounts for ‘lost’ members; providing ready access to forecasts of members’ likely retirement lump sums; making it easier for members to make voluntary contributions through their employers; providing “real choice” through simpler information and clearer disclosures; tougher regulations; and maintenance of the co-contributions scheme. Beazley noted the ASIC ‘shadow shopping’ results published last week and said the fact that one in five members were switched into more expensive funds was “an unacceptable practice which is largely being driven by commission selling”. The 30-page discussion paper marks a step-up in the Opposition’s campaign to tackle the Government on economic issues. Beazley continually referred in his CMSF speech to the current account problem and that the Government had failed to deliver on any of the necessary big-picture economic issues. Although he described the co-contribution scheme as a “watered down” version of the previous Labor Government’s 3 per cent contribution proposal Labor would maintain the scheme “in the interests of certainty and stability”. Further, Labor would maintain contributions splitting and extend this to inter-dependent relationships including same-sex couples. The case for “simpler, tougher regulation” was supported by last week’s Productivity Commission report from the Taskforce on Reducing the Regulatory Burdens on Business, he said. The super regime was burdened by a highly complex tax system, subject to considerable compliance requirements of which much of the cost is borne by consumers and where the rules had been changed again and again – “piecemeal change that has undermined policy outcomes and increased complexity”.