The Financial Services Council’s (FSC’s) proposal of the definition of superannuation is orientated towards the outcome the system is designed to achieve, rather than the means by which it is achieved.
The FSC’s submission to the Commonwealth Government defined super as “to deliver dignity and independence for all Australians in retirement by providing replacement income that is adequate to provide a comfortable standard of living”.
FSC chief executive, Sally Loane, said defining super and enshrining it in law would serve as a yardstick against which all future decisions impacting on the retirement system can be measured.
“It is imperative that superannuation is taken out of the short-term budget cycle. Defining the objective of superannuation and making it law should orientate the debate towards the long-term goal of ensuring we have a system which will provide adequate and comfortable retirements for all Australians,” she said.
“The age pension system, which costs $44.7 billion each year and rising by seven per cent annually, will never be able to deliver comfortable retirements for Australians in an ageing society.”
The FSC also recommended the government enshrine a short and concise objective in legislation, and that the enshrinement occurs through a stand-alone bill, rather than through existing superannuation law.
“Taxpayer support for super must be consistent with the objective of more Australians being able to independently fund their retirements. We should focus on middle Australia, the vast bulk of our population, and those with the greatest capacity to reduce their reliance on the age pension.”
