Pauline Vamos: In

Australia, the 9percent we know over the long term isnot going to be enough for most people.So even with the economists proposing12 per cent by 2015, it means stoppingthe momentum of the level of engagement,it’s going to start reversing membersputting in extra contributions.So from our point of view it wasn’ta solution that looked at the wholepicture. And the other issue I wouldraise is that it was put in the paper, noconsultation with the industry, so thefirst time we see it is the same timeeverybody else sees it and suddenly wehave the press knocking down on ourdoor.

Now, we spend an inordinateamount of time and money speaking topeople within the industry and outsidethe industry so we go to governmentwith an informed public policy view.And so from an industry point ofview we say well, hold on, where is thecourtesy here? Because had we had thatdialogue and understood, then maybethe reaction in the press would havebeen a little less sharp.Fiona Reynolds: We came out aswell as ASFA, fairly early in the piece,to say what we said – retrograde andshort sighted. And I actually think westill stand by that opinion, for a numberof reasons.

I agree with Pauline that thefirst time we see it is a letter that’s gone,it’s in the newspapers, we very quicklyhave the press on the phone, ‘can yourespond?’. From a political angle, onceyou start moving the SG from 9 to 6,how long is from 6 to 3, to nothing,you know. I don’t think the SG shouldbecome a plaything of different governmentsthat come and go, we’ve alreadyhad a little bit of that.Tony Cole: It was created by government.Fiona Reynolds: Well, we’re talkingabout getting to 12 per cent. NickSherry as early as this week was in theFin saying there is no way we’re going to12 percent.

That’s a couple of days agodespite the fact we’ve got the Henry andHarmer reviews going on. Then there’sissues for members, but there’s alsoissues for superannuation funds. If theydon’t know how much money’s comingin on a monthly basis, because we aregoing to keep moving things, how canthey plan their investment strategies?How do they know what they are goingto be doing? And it might be okay forthe public servants because they are ina defined benefit superannuation fundthat won’t be effected.

Tony Harris: Arguing about the certainty of inflows to the industry is avery curious argument. It suggests that you’re the only industry in Australiathat has to have certainty, everybodyelse has to have uncertainty.Fiona Reynolds: We still have todeal with uncertainty ….Tony Cole: Traditionally half theaccumulation is earnings rather thaninflows, so you have got no certainty onthe earnings side anywayRob Goodlad: Well there’s certaintyand there’s confidence as well.Just thinking while you were talkingthere, Fiona, I remember fifteen yearsago there was lots of discussion abouttax rates and different points throughsuper and I had an unpreserved amountand I thought, blow this, I’m pullingmy unpreserved amount out and I’mjust going to put it into a deposit on ahouse.

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