It’s a week before the Morrison Government reveals the full detail of its 2021 budget.
There has been plenty of press gallery back-grounding, but for superannuation some big issues remain unresolved.
Senior journalists have been told that Scott Morrison will not reverse the legislated SGL rise from 9.5 per cent to 10 per cent but it remains uncertain as no Government Minister will confirm this.
Even less certain are the four increments of O.5 per cent that are set to follow each July until 2025. This guarantees super will be part of the 2022 election contest.
The net result is that workers, employers and the finance professionals who advise them are left guessing about some pretty big issues.
Affirming your 2019 election promise not to cut super should be a pretty simple thing to do but not inside the Liberal Party room.
The reaction of the dirty-dozen – that clutch of ultra-dry conservatives attempting to drive the Government’s super agenda from the backseat – suggests the road will be uncertain.
They are accusing their own leaders of lacking “courage” for suggesting they stick to the promise that they all got elected on.
There is no sign their campaign against their own leaders will abate. There is no sign of their Prime Minister reigning them in.
Putting them in their box requires conviction – the very thing the Prime Minister lacks.
These policy failures will come home to roost.
After decades of pretending the gender super gap didn’t exist, the Liberals will now have us believe they are going to do something about it next month.
This will take a feat of political amnesia unequalled in our times.
The same government that just poured 18 months of energy (in the midst of a pandemic) into cutting women’s super now wants us to believe they think women deserve more super.
The same Prime Minister who unleashed his backbench bloodhounds on workers’ super balances now expects us to believe he’ll put them back in the doghouse.
The same Scott Morrison who fought against Labor’s plan to pay super on top of paid parental leave income at the last election now expects us to believe that he embraces it.
Clearly political expediency lies at the heart of the Government’s thinking here, as opposed to genuine conviction.
But it’s not just a lack of conviction that haunts the Morrison Government’s thinking on Super. There’s also a big competence issue.
The Your Future Your Super Bill is a case in point. Announced at the previous budget it has the laudable goal of measuring performance and weeding out the chronically poor operators.
Labor signed up to the objective, but warned the Government that there were critical flaws in its methodology that could actually drive down investment returns and see a hike in administration fees.
Undeterred, they pressed on, only to be met with a wall of expert opposition.
They appear to have relented on the measures that would have killed off Australian workers’ retirement savings being invested in Australian infrastructure.
They have also seen the folly of measuring investment fees but ignoring the (larger) administration fees. This is good.
Two diabolical measures remain.
The proposed law contains a “direction making power” that makes Josh Frydenberg Australia’s Superannuation Trustee in Chief.
It gives him the power to cancel investments he does not like.
It is cryptonite for investment certainty.
The type of Sovereign Risk normally associated with tin-pot dictatorships.
It has to go. Labor will not support the bill unless it does.
The other provision concerns stapling members to their super funds. A recommendation of the Royal Commission, Labor supports it.
But what Hayne didn’t contemplate, and what makes no sense, is to staple a member to a fund which the Government has determined to be so poor, it must be closed to new members.
It would make first class material for a second class comedy, but the implications are no joke.
Treasury estimates that as many as 3 million Australians could fall into this government-designed trap.
It’s not too late to sort this out.
The Government delayed an expected vote on the Your Super, Your Future bill in the last sitting and now has an opportunity to pull back.
I call on Scott Morrison to work with Labor to deliver what he promised at the last budget.
All sides of politics should be able to agree that lower fees, better returns for workers and a pool of capital that supports nation-building infrastructure are worthy goals.
Australians expect no less, and they expect us to work together to achieve those goals.