Minister for Financial Services and Assistant Treasurer Daniel Mulino says he aims to have draft legislation for Tranche 2b of the Delivering Better Financial Outcomes reforms released “this year, and as soon as possible”. 

At the Conexus Retirement Leaders Summit in Canberra on Wednesday Mulino flagged completing Tranche 2 as a key priority in his portfolio as a way to help superannuation funds deliver better information, guidance and advice to members as they retire. He said he expected that consultation on the draft would be relatively quick. 

“With that kind of timing, people are familiar with the issues, and I suspect we could get pretty quick feedback from the sector as a whole once that goes out,” he said. 

“But I just wanted to emphasise that it’s not it’s not like nothing’s happening now, so there’s a lot of consultation going on to try and maximise the extent of consensus. This is an area that I would describe as being difficult for a long time.” 

Mulino said reform of the advice sector “has been a policy area where there’s been a great deal of polarisation of parts of it”. 

“But I feel like with this particular set of reforms, if we aim for not giving anybody all they want, but giving everybody a significant amount of what they feel is the right outcome, I feel we can get to a point where consumers will be much better off, and that, to me, is the key KPI,” he said. 

Mulino told the summit, a joint initiative held by Retirement Magazine publisher Conexus Financial and its philanthropically funded think-tank The Conexus Institute, that with a significant number of Australians nearing retirement, and with that number set to grow in coming years, “DBFO is a particularly time sensitive and important reform”. 

“I’m very conscious that the previous minister, who managed to undertake a lot of very important work in this area, has obviously passed a tranche of legislation, what I think is loosely termed the ‘2a’ tranche of legislation. So it’s a real priority for me to get the ‘2b’ tranche out, which I think contains a number of elements which would be very important to people in this room. So that’s certainly a priority. 

“It’s a complex piece of work. It’s a piece of work that requires quite a degree of drafting resources, but it’s well underway.” 

Mulino warned that these further reforms, including the creation of the New Class of Adviser, would require further consultation.  

“(Consultation) was something that I feel worked very positively when I was an adviser back in the days of the previous Assistant Treasurer,” he said. 

“I’m fully conscious that when it comes to the very technical work of drilling down into the detail and figuring out how you would give effect to that, it will require a lot of consultation. I would note that there has been a lot of consultation already.” 

Mulino said he would be “building on a process” into which the superannuation, financial advice and life insurance sectors, among others, would have input. 

“There’s been a lot of good work undertaken already, and then there will be more consultation as we move towards an exposure draft that can be looked at so that you in this room and others can examine the two bits together, which I understand is going to be necessary before people can make a judgment,” he said. 

Mulino said that “where we go to on the post-retirement phase is one of the big policy issues for the super world”. 

“Reflecting that complexity, what the government’s been doing to date is to start with best principles, and to start with gathering more data and improving the reporting,” he said. 

“Those are, in a sense, ‘no-regrets’ policies that can help us all, both government and the sector, understand better where it is that we might be going.” 

Mulino said that as much as the retirement phase of superannuation needs to be looked at closely, and that it is an important piece of work that needs focus over the next few years, Australia does have a retirement income system that “is very strong and is one of the best in the world”.  

“I just want to frame that while I think in that post-retirement phase there are things that we need to do to make it work better, I do think it’s worth noting that when you look at our retirement income system overall, I think it has evolved to be a very strong system,” he said. 

“In most of the global rankings, it’s in the top category, so it’s not like we’re starting from a bad place. I think we’re starting from a good place, but we do need to improve it further.”