OPINION | It’s shaping up to be another busy year for the superannuation industry in 2017.
More proposed legislation is set to come and there are inquiries underway in Parliament, the Productivity Commission and the industry itself.
Late last year, reforms were made to superannuation laws. Labor was broadly supportive of these changes, having led the debate on the need to update super tax breaks, particularly for high-income earners.
We also argued to ensure that low-income earners would not be disadvantaged when putting money into super.
Labor proposed a package that went further than the government’s legislation in two ways: by further reducing the annual non-concessional contributions cap to $75,000 (from $100,000) and by lowering the high-income superannuation contribution threshold to $200,000, not the $250,000 the government proposed.
In addition, Labor opposed several of the measures in the government’s package, which included new expenditure, including reforms that allowed catch-up concessional contributions and tax deductibility for personal superannuation contributions.
Defining super’s purpose
Now that the reforms have passed, however, the focus will shift to a range of other important issues in the sector, including defining the objective of superannuation.
Labor supports this, as recommended by the 2014 Financial System Inquiry, but believes it is crucial that we get it right, as it will set the framework for making decisions around superannuation policy into the future.
Labor referred the government’s Superannuation (Objective) Bill 2016 to a Senate committee late last year for further examination. This established that important concerns remain, including those of major industry bodies the Australian Institute of Superannuation Trustees, Industry Super Australia, the Financial Services Council, and the Association of Superannuation Funds of Australia, who all called for a rethink of the wording of the objective.
Labor has called on the government to consult further with the superannuation sector before proceeding with this legislation.
Labor will participate constructively in this process and I am already having discussions with stakeholders about their views and how we may reach agreement on such an important measure.
Many other issues remain high up on the political agenda for Labor, including: unpaid super; compliance; fees and charges; performance of funds; and insurance. There are several inquiries underway in these areas. I acknowledge that the industry itself has prioritised many of these issues and is leading work designed to improve services to members and help them maximise their superannuation savings.
There is also the Turnbull Government’s pursuit of superannuation governance changes and the Productivity Commission’s inquiry into competitiveness, efficiency and default arrangements – all to deal with this year.
Labor’s focus for all of these reports, inquiries and debates will always be on the need for Australia’s superannuation system to put members’ interests first and to ensure that any policy or legislative changes serve their best interests.
I would like to take this opportunity to thank all of the organisations and individuals who have taken the time to talk with me in my first six months in the portfolio of financial services. I have learnt that it is certainly a dynamic and complex portfolio undergoing huge amounts of change. The advice I have received during my first few months in the role has been invaluable in assisting me with my job.
I look forward to strengthening these relationships in 2017.
ACT Senator Katy Gallagher is shadow minister for small business and financial services. This article first appeared in the May print edition of Investment Magazine. To subscribe and have the magazine delivered CLICK HERE. To sign-up for our free regular email newsletters CLICK HERE.