The adoption of the Tax File Number as a universal identifier by Australian super funds would deliver more efficiency gains than the rest of the ‘SuperStream’ proposals combined, according to Australian Administration Services boss, John McMurtrie. In a lively address to a Fund Executives Association forum last month, the former chairman of Sydney Water joined the chief executive officer of IQ Business Group, Graham Sammells, to dissect the administrative side of Jeremy Cooper’s review, and generally declare that its forecast savings seemed exaggerated, and its chances of turning into law uncertain. The declared annual savings of $1.2 billion seemed a ‘fuzzy figure’ to McMurtrie, given the stated total operating costs of the industry in 2008-09 were just $3.5 billion, and the combined revenues of the major member administrators – Superpartners, Pillar, AAS and Citistreet (which lost $7 million in 2007 before its sale to Sunsuper) – was only $400 million altogether.
McMurtrie said if only one SuperStream recommendation was ever implemented, it should be the adoption of the Tax File Number as universal identifier, because this alone would deliver “50 to 75 per cent of the efficiencies in the entire package”. He suggested the best way to implement this was for a ‘total superannuation paid’ field to be added into the Business Activity Statements and Income Activity Statements regularly sent by businesses to the Australian Tax Office. “It would be the best way to check whether an employer was complying,” he said. Both speakers to the FEAL symposium agreed that data standards for super transactions would have to be legislated, otherwise “nobody is going to spend that first dollar”. Sammells said it was uncertain how high the SuperStream reforms were on the rural independents’ priority list, but he suspected they would like the look of the data standards used by the new Medicare clearing house.
“It was a good strategic move by Chris Bowen to make Medicare the default clearing house, it gave the Government more direct control of the process, and credit to Medicare, (it) came up with some good standards in a short space of time. Many of the funds gathered here today will have received transactions from them.” McMurtrie went so far as to flap before the FEAL audience a copy of the brochure outlining those Medicare data standards, and then brandishing the much thicker document containing the swimEC standards, arrived at over several years by a special committee of the Financial Services Council. “The name swimEC makes people turn off, and I’m afraid their standards would fail,” McMurtrie said. However, both he and Sammells approved of the fact that the swimEC committee had actively engaged Jeremy Cooper, fresh from completing his industry review, to help develop a blueprint for getting SuperStream accepted and implemented by the industry.