The claimed failure of key stakeholders to develop a consensus around adequacy being a key component of the objective of superannuation has seen a majority of the Senate Economics Committee back the Government's
legislation that the objective of super should be to supplement the Age Pension.
While Australian Labor Party members of the committee issued a dissenting report calling on the Minister for Revenue and Financial Services, Kelly O'Dwyer to withdraw the legislation until it is fixed, the majority report backed the Government's position.
It based its backing on there being "no consensus position for the introduction of subjective descriptors such as 'adequate' or 'comfortable' ".
"There was no consensus position for the introduction of subjective descriptors," the committee report said.
"The committee therefore considers that the objective as drafted will enhance the stability of the superannuation system by creating a clear framework for assessing superannuation policy."
It said that the committee did not consider that either a relative or absolute level of retirement income should be included in the primary or subsidiary objectives.
"Indeed, the subjective nature of terms such as 'adequacy', 'comfort', and 'dignity' have the potential to undermine the successful implementation of an objective for the superannuation system by focusing on retirement incomes as a whole," the report said.
"While there may be merit in striving to set an objective for the entire retirement income system, this is the not the purpose of the bill under consideration by the committee."
Labor members of the committee strongly disagreed with the findings of the reporting, pointing out that "there is overwhelming opposition to the government's current proposed objective".
"Key stakeholders including the Australian Institute of Superannuation Trustees (AIST), Industry Super Australia (ISA), the Financial Services Council (FSC), the Institute of Public Affairs (IPA)and the Association of Superannuation
Funds of Australia (ASFA) criticised the government's lack of consultation during the inquiry and raised concerns with the objective as it is currently proposed," the Labor senators said.
"The minister needs to withdraw this Bill, undertake genuine and detailed consultation with the industry stakeholders and work constructively with Labor to satisfy the Financial System Inquiry (FSI) recommendation to reach broad political agreement for the objective.
"Labor supports legislating an objective for super and we are ready to work constructively with the government to achieve this goal," they said.