Rice Warner has warned that the Productivity Commission’s final recommendations could lead to a worse superannuation system than that which we already have, suggesting that a defensive stance from the Commission in its final report had led to claims being made without sufficient evidence.
Rice Warner accused the Commission of adopting an aggressive tone, with “many unsubstantiated assertions”, in its final report, suggesting that it may have been “affronted by the lack of enthusiasm for its proposals in the draft report”.
“Most disappointingly, the link between the PC’s recommendations and its earlier analysis has become increasingly tenuous as the inquiry progressed,” Rice Warner said.
The consulting house pointed to the Commission’s suggestions that the super system’s role in intergenerational wealth could contribute to wealth inequality and that competition in the industry is “at best superficial” as two such assertions.
It took particular issue with the Commission’s suggestion that the super system was “broken”. The fact that it usually features amongst the four best pension systems in the world and that most developed countries both pay more in pension payments and are seeing these costs rising disprove this belief, Rice Warner said.
Indeed, Rice Warner warned that believing the current system was broken and couldn’t be remedied with targeted improvements was a “fundamental flaw” in the PC’s approach and meant that it had “ended up recommending a system worse than the current one”.
Rice Warner also said that the Commission had “wandered well outside [its] brief” in suggesting that further national inquiries into the impact of super on national savings in funding retirement income be held before an increase in the superannuation guarantee is implemented. It said that was “a random comment made without any relevance to it in all the PC’s reports for this inquiry”.