The SMSF Association said it was disappointing to see the introduction of some statements that perpetuate myths and introduce bias into the explanatory materials for the Objective of Super Bill tabled in Parliament this week.
Association chief executive Peter Burgess said the statements were inserted after the consultation phase and appear to have gone through virtually unnoticed.
Burgess said the statements show changes to the language from the exposure draft stage to the final explanatory memorandum that accompanied the bill.
He said, the Exposure Draft – Explanatory Memorandum section 1.36 states “the focus on delivering income in the objective makes it clear that superannuation savings are intended to be used in retirement”, whereas in the Bill – Explanatory Memorandum section 1.28, it states “the focus on delivering income in the objective makes it clear that superannuation is not for minimising tax on wealth accumulation or enabling retirees to leave tax-effective bequests”.
“Legislating an objective for superannuation is not a new concept, it is something successive governments have sought to achieve,” Burgess said.
“The SMSF Association has been a long-term supporter of the need to legislate an objective for superannuation. The sector needs stability, consistency, and certainty. Continual changes to the superannuation system erodes confidence and trust and adds complexity to what is an already complex system.”
He said, however, it is important to recognise that superannuation is just one component of a broader retirement income system.
“The framing of the Retirement Income Review and the final report highlights the importance of considering the broader policy impacts across the retirement system,” he said.
“Considering superannuation policy in isolation risks poor policy outcomes and therefore [it’s] important policy changes are considered in the context of the overall retirement system.”
Teal MP Zali Steggall also had concerns over the Bill and said she has been sceptical about its usefulness and suspects an “ulterior motive” from the government.
“The government has not laid out a clear or cogent case as to exactly why this Bill is needed and why it is needed now. I would like to see further clarity from the government on this point: why this Bill, and why now?” she said.
“We have a Bill in front of us that seems to be a solution in search of a problem. Surely, we could use our time in this House more effectively to address the existing inequities in our super system.”
Steggall said the Bill’s Explanatory Memorandum states the superannuation system is an important source of capital in the economy that can support investment in capacity-building areas of the economy where there is alignment between the best financial interests of members and national economic priorities.
“This suggests potential tension between the role of the superannuation trustee, whose duty is solely to members of a fund, and those who decide national economic priorities. This seems to be the government wanting to get its hands on superannuation funds,” she said.
“The apparent intention of the Bill is that future actions, either legislative or those delegated to policymakers in law, consider and take into account the purpose of superannuation as set out in this Bill – that is, that it looks at the best financial interests of members and this idea of national economic priorities. What exactly should happen when those two clash?”
Tim Miller, technical and education manager for Smarter SMSF, said Steggall’s speech highlighted what the industry has long intimated.
“That is ‘what’s the point?’ The previous government tried and failed and this objective isn’t definitive in what it achieves for superannuation members, it’s more a guidance statement for policymakers that ultimately they can interpret to mean what they want it to mean,” he said.
