The industry superannuation movement has called for the withdrawal of the superannuation reform bills before Parliament while the Turnbull government’s royal commission into the financial system runs its course.
“You’ve got three bills before Parliament that have been subject to intense lobbying by the banks and might be seen as serving their commercial interests,” Industry Super Australia CEO David Whiteley told The New Daily.
“The government should withdraw those bills immediately.
“It would be duplicity to have a royal commission looking at the operations of the financial sector including the superannuation system and to pass those bills at the same time.”
As part of its terms of reference the commission will be charged with investigating any evidence of directing super fund monies to areas that don’t benefit members.
“The commission should investigate the vertically integrated model of the banks that has consistently underperformed the profit to members model over 15 years,” Mr Whiteley said.
The move to include the superannuation sector in the Royal Commission was questioned by Martin Fahy, CEO of the Association of Superannuation Funds of Australia, an umbrella group including both for-profit and not-for-profit funds.
“I’m disappointed that having had a decade to 15 years of reviews to the super system that included the Murray inquiry that a system ranked so well in the world is to be subject to a royal commission and its going to take a lot of effort and going to be quite costly,” Dr Fahy said.
“We believe that there’s a lot of evidence out there to display the important and successful role superannuation plays for the Australian economy.
“Given that level of confidence and reassurance about the system and the impact it has on people’s daily lives in terms of infrastructure, bank deposits and supporting Australian companies, [the danger is that the Commission] will distract from the effort of driving innovation, driving efficiencies and good positive change for members outcomes from it.”
Dr Fahy said it was important that the Commission expedites its work efficiently. “There’s no evidence that there’s systemic failings across the super value chain and I would hope that this would be something we can get through in an efficient way and get on with the important business of supporting Australian retirees,” he said.
Ian Yates, CEO of COTA, a lobby group looking after the interests of older Australians, said “my hope in relation to the royal commission is that it doesn’t delay reform that is already under way and that needs to happen”.
“Issues like righting the gender imbalance in relation to retirement incomes and fixing areas where there are still gaps in the system are very important,” he said.
“These include improving the intersection of the superannuation and pension systems and dealing with the situation where people end their working lives with insufficient superannuation.
“The government also needs to get on with abolishing the $450 per month threshold on super payments.”
The threshold means that people earning below that level do not build up super balances.
* The New Daily is owned by industry super funds