With a new Prime Minister at the helm of the Federal Parliamentary Labor Party, the date of the next Federal Election might be extended beyond 14 September and therefore Parliament might resume sitting after its winter recess.
If that proved to be the case, then some of the last elements of the Government’s financial services legislation might find their way through the two houses, but much would depend on the political priorities being pursued by both sides of politics at that time.
Thus, the reality for the superannuation industry is that it has probably witnessed all of the legislation and consequent regulation it is likely to see from the current Parliament and must now brace itself for the outcome of the Federal election – on whichever date it is finally held.
On that basis, and notwithstanding tightening public opinion polls, it should probably also be assessing what would likely change in the event of the Coalition gaining Government and moving to implement its own policy approach to superannuation.
What we already know about a Coalition Government is that, notwithstanding its frequent criticisms of the ALP’s approach, it would not act quickly to lift the concessional contribution caps.
Rather, it would wait until it believed Budgetary circumstances permitted, making this a second term agenda item, albeit something capable of being promised ahead of another Federal election.
Something likely to be far more quickly addressed, however, would be default funds under modern awards and the manner in which the Coalition has argued that this has entrenched the interests of the major industry funds.
It can be expected that a Coalition Government would not only move to make all approved MySuper funds eligible for selection as default funds, but also remove the role of the industrial judiciary and therefore the centrality of industrial awards in the process.
Not unconnected to those moves, a Coalition Government can also be expected to address what it sees as the governance failings of some superannuation funds (read industry funds) and to look to implement the findings of the Cooper Review with respect to the appointment of independent directors.
The Coalition could achieve many of its objectives through simple changes to the linkages between the Superannuation Industry Supervision (SIS) legislation and the Corporations Act to dictate that superannuation funds adhere much more closely to the rules as they apply to publicly-listed companies.
Such a move would see a substantial end to the somewhat unique trustee board regime which has been the bedrock upon which the superannuation industry has grown over the past two decades.
The net result of such changes would likely be an incremental reduction in the influence of trade unions over the running of industry superannuation funds and a narrowing of the wide discretion currently enjoyed by trustee boards.
It follows that if superannuation fund boards were to conduct themselves in much the same fashion as the boards of publicly-listed companies, then their capacity to undertake some types of expenditures would be significantly curtailed. As well, their ability to pursue amalgamations with other superannuation funds might be more problematic if they had to be referred to members for approval.
As is always the case, Governments rarely deliver on all the policy initiatives they promise while in opposition, but the Coalition has a more defined agenda on superannuation than at any time in the past – and seems likely to act on a substantial portion of it.
Just how much of a Coalition’s agenda actually makes it into legislation in its first term of Government would depend on the balance of power in the Senate, but as busy as superannuation funds have been in terms of implementing Stronger Super, they should brace themselves for more change to come.
