OPINION |Conexus Financial wants to see the political system working to implement good, evidence-based
public policy. Both major players have contributed to important financial services reform in recent years but
that work must continue apace.
The changes made to the superannuation tax rules as a result of the 2016 federal budget sent shockwaves through our industry, but they were necessary to address the disproportionate weighting of tax breaks to the wealthy, and to make the system more flexible and inclusive.
Unfortunately, a perception of “constant tinkering” with the rules, by successive governments of all stripes, has left the public feeling that superannuation can’t be trusted.
Both retail and industry funds have an important role to play in lifting the transparency, accountability and integrity of our system to rebuild public trust.
Our political leaders could help by taking superannuation policy out of the annual budget cycle, as Labor suggested a number of years ago, and making changes to super only in line with the five-yearly Intergenerational Report.
In January, at the Conexus Financial Chair Forum, Minister for Financial Services Kelly O’Dwyer told me she supported this idea. So, in February, when I had the opportunity to address the Federal Labor Business Forum 2017 Leader and Shadow Ministry dinner, that was one idea I suggested for an initiative where both sides should get cracking on building a bipartisan commitment.
Australia doesn’t have time to waste. While no one is denying the reality of a constrained federal budget, it is short-sighted to think we can afford any further delays in lifting the super guarantee to at least 12 per cent by 2025.
Labor has promised to do this, and it is a promise I sincerely hope the party honours if elected. Opposing the Turnbull Government’s proposed legislation to define the purpose of super because it lacks any reference to helping people achieve an adequate retirement income is pointless unless we do something practical to help average people achieve this goal.
At Conexus Financial, we want to see the political system working to implement good, evidence-based public policy. That’s why we enthusiastically engage with both sides of politics. Indeed, since 2012, both major parties have played a key role in introducing reforms to the advice and life-insurance industry.
For the past decade, Investment Magazine’s sister title, Professional Planner, has been at the forefront of agitating for higher professional standards in the advice sector. So it was pleasing recently to see the latest round of financial planning reforms pass Parliament.
Looking beyond the financial services industry for a moment, one of the biggest social and economic challenges facing Australia is housing affordability. If our nurses, teachers, childcare workers and police can’t afford to live in our major cities, we will all be in big trouble.
Labor took a plan to the last election to reform negative gearing and the capital gains tax discount, and gained ground on the Liberal Party. Labor should persevere with these policies.
Of course, such changes would work best if implemented as part of an agenda of broad-based tax reform. Labor would do itself a disservice if it refused to engage in an intelligent manner with ideas like reducing corporate tax rates or lifting the GST.
Our system works best when the opposition is widely perceived as a viable alternative government. Therefore, another piece of unsolicited advice I offered the shadow cabinet was that they needed to do more to engage the business community.
Despite the important contribution of so many Labor-led reforms to our nation – including Medicare, the Higher Education Contribution Scheme, the float of the dollar, the superannuation guarantee, and the 2008 stimulus package – the party still struggles to be seen as a safe pair of hands for the economy.
If Labor wants to be taken more seriously by the financial services industry and business community at large, it needs to get better at communicating with it – banking royal commission or not.
After all, Labor’s pledge is “to look after middle-class and working-class Australians”, and it is impossible to do that without engaging constructively with the nation’s employers.
This column is based on a speech delivered at the Federal Labor Business Forum 2017 Leader and Shadow Ministry dinner, of which Conexus Financial was the official sponsor. This version first appeared in the April print edition of Investment Magazine. To read the full speech click here.