The minister for revenue and assistant Treasurer, Senator Helen Coonan, has only had superannuation as part of her portfolio for a year and already she is seen as being the most influential person in this industry.
If it gets through the Parliament, her recently announced package of reforms designed to strengthen the safety of super will have an impact on all super funds, as it requires them to be licensed and to have proper risk plans in place. And if Coonan gets choice-of-funds through too, the face of the super industry will be forever altered.
Coonan is viewed as having influence because she belongs to “the Government of the day”, but many of the policies she is charged with implementing were developed before she took on her portfolio. Nonetheless, she is seen as having the ultimate say on the way these are introduced and on the direction of future superannuation reform.
What seems to have most impressed those who nominated her, however, has been the way Coonan has taken on her superannuation duties. She is considered to be intelligent, quick to grasp the issues, most willing to listen and as having brought a breath of fresh air to the industry. “This is a big job, and one I think she is handling well at this early stage,” said one nominator.
Coonan, the first woman to hold a treasury portfolio since Federation, says she does have an open mind about looking at different ways of doing things “when the budget allows” and her office doors are open to anyone with good suggestions.
She adds that she put a huge effort into the safety review — conducted by the Superannuation Working Group headed by former ANZ Bank chief Don Mercer (see page 20) — “to get a response that was balanced and right”.
She must have succeeded, given that her package was generally welcomed by the industry, drawing huge sighs of relief because it ignored the more controversial recommendations to introduce capital adequacy requirements and to give APRA the power to make prudential standards.
“I don’t think that the system was terribly unsafe, but there were some enhancements that were needed. You need a license to have a dog. Why wouldn’t you need a license to manage people’s money?” Coonan says.
Her immediate priority now, she says, is to unroll the Government’s pre-election promises, which include reducing the top surcharge rate and a co-contribution scheme for low income earners.
Coonan says the election package contains many pointers of the Government’s future direction in super. “The biggest focus of mine is looking at people who would otherwise be excluded from super,” she says, adding that another area of importance is to decouple work and superannuation. “At the moment you have to be in the workforce to get super,” she says.
According to Coonan, the Government recognises the “three pillars” as the foundation of super. It has no plans to increase the SG rate and believes instead in encouraging a culture of voluntary savings first. After that, it will examine how savings can be further incentivised.
While she believes there is enough incentive already in the system to encourage people to save, Coonan says she is willing to consider different tax mixes, subject to budgetary constraints. “There may come a time when we can do some different modeling, but we cannot do it immediately because there are other pressures [related to defence and security].”
On choice-of-funds and portability, Coonan believes there is no reason why people shouldn’t be able to choose where to put their savings. “I cannot think of anything more inequitable than someone having superannuation trapped in an underperforming fund.”
She adds that the Government does not expect there to be a wholesale movement of super if choice is introduced. “We just want to open the doors, but we don’t want to push people out of the room.”
Coonan grew up in country NSW, where she won a scholarship to the University of Sydney, before embarking on a career in law that included establishing her own law firm.
In 1996 — and again in 2001 — she was elected as a Liberal Senator for NSW. And in 1998 she was appointed as government deputy whip in the Senate, a position she held until her ministerial appointment in November last year.
During what little time she has free, she loves walking with her husband, Andrew Rogers QC, so much so that she is about to get two puppies to make her walk even more.
She also sneaks off to see a film whenever she can, and is a keen supporter of both the performing and visual arts, with a special penchant for the opera.
