On May 5, just two days after announcing what his Government called the biggest superannuation reform in a lifetime, the Minister for Financial Services, Superannuation and Corporate Law, the Hon Chris Bowen, sat down with the industry to discuss three of the four reviews which have so preoccupied it this past year. Henry, Ripoll and Cooper are three names bound to echo around the halls of super funds for many years, even if the increase in the compulsory Super Guarantee (SG) from 9 to 12 per cent went against Henry’s recommendations, the banning of commissions was far stronger than anything in Ripoll’s final report, and the response to Cooper has not yet been made. This roundtable was also too early to discuss the ‘Johnson’ report on making Australia a financial services hub, which the Government ended up completely endorsing last month, including clarity that non-Australian assets managed by firms based here would not be subject to any tax liabilities. Nevertheless, the industry had plenty to ask the Minister. The result was a lively roundtable, and we thank Vanguard Investments, which claims to have never paid a commission anywhere in the world, for agreeing to sponsor it. Proceedings kicked off with the big question of whether the SG increase had any chance of getting to the Senate before a Federal election later this year.
Minister Bowen: I think getting it done before the election obviously depends largely on when the election is. If the election is sooner rather than later, that is more difficult. If it’s later rather than sooner, it’s a touch more likely, but I don’t think anybody should be relying on this going through before the election, because that would be a difficult task. I’m not ruling it out. We have to draft legislation, consult and then get it through both Houses, and against the opposition of the Opposition, which makes it more difficult. It’s easier to get it through, obviously, in terms of timing, if I can say to the managers that govern business in both Houses that it’s going to go through without much opposition, then it’s easier to get it in an earlier spot. If there’s opposition, then it takes longer, and clearly there will be opposition to this. The superannuation reforms are part of a broader package, of course, and they are tied to the revenue coming from the Resource Super Profits Tax. And again, the Opposition have indicated that they oppose 12 per cent [contributions].
Darren and Chris answer this question and more in episode eight of The Rate Debate.