The chair of UniSuper, Chris Cuffe, says Labor’s proposed custodian council should be an experienced, independent group with a long-term focus, the members of which should have no commercial interest in the superannuation industry.
Cuffe commended the proposals recently announced by Bill Shorten, minister for superannuation and financial services, but said the concept could be enhanced, making it independent of the thinking of the government, treasury and the Australian Prudential Regulation Authority.
“They want to be highly experienced, but if they had existing commercial activities, they would relinquish those to be on this group. So there’s absolutely no doubt that they have no vested interest. And they would need to be paid by the government. I see nothing wrong with that. I see this group very akin to a reserve bank,” he said.
A model on a par with the Reserve Bank would see council members paid a stipend to hold that position, he added.
“I think a lot of the poor superannuation changes we’ve had through the years – there’s been a lot of good change, it’s developed – but there’s been poor decisions along the way and I think vested interests really get in the way of solid thinking.”
Cuffe said the council could influence the speed of change in the industry, its independence meaning that if there’s a proposed change, its implementation wouldn’t rest on kneejerk reactions to compliance issues.
“We’re dealing with so much change, it seems constant. It would be nice to have this very independent group having solid thinking on things, proposing it in packages… We really don’t have to rush changes through unless there’s a particularly poor law that has to be fixed in a hurry. I would not think super needs to change every year, this is a big long-term thing.”
A long-term proposition
In response to criticism of the idea from Senator Matthias Cormann, Cuffe said the Coalition might have made a mistake in logic.
“It will be a really missed opportunity if the Coalition wins government and they don’t take this forward,” he said.
“You’re getting very widespread, and some quite high-profile, people saying this makes a lot of sense. And that’s why it’s disappointing the Coalition straight off poo-pooing it.”
Cormann, shadow minister for financial services and superannuation, said we already have a council of custodians in the form of the Australian people.
“To protect people’s superannuation savings, we don’t need more bureaucracy, we need a change of government.”
Cuffe said he would join industry in petitioning the Coalition to reconsider its stance should the opposition be elected in September.
“At the moment I don’t think it’s a matter of criticising the Coalition too much because it’s early days. But I would encourage the Coalition not to dismiss the concept. Give it a proper airing, the right structure will add a lot of value, it’s as simple as that.”
Cuffe said experience across different sectors of the industry is important, including industry, retail and government funds, as well as SMSFs. He also emphasised the merit of considering issues in a longer time frame.
“As Mr Shorten proposed, it needs to be within a charter. What’s this all about? We should be thinking the long term. We should be linking decisions around super and the Age Pension, which are two different departments of government, so they hardly ever talk to each other.”