If the superannuation industry has not already circled the wagons, then it most assuredly should.
Make no mistake, the Australian superannuation industry is under attack and when the current emergency situation generated by the COVID-19 pandemic is at an end, then superannuation funds may find the environment in which they operate changed for all time and not in ways they will find to their liking.
In any other circumstances than a pandemic-induced national emergency in which entire industries have been
virtually closed down and superannuation fund members thrown on the dole queue the industry would be vocally up in arms against any Government which acted to pull down the barriers to early access to superannuation.
But, of course, hundreds of thousands of workers have been peremptorily thrown out of work and many of them are facing financial and family collapse which may or may not be made avoidable by the Government’s $130 billion measures such as the JobKeeper program and the boost to JobSeeker.
Thus, who amongst Australia’s most senior superannuation executives is going to wear the public opprobrium and negative publicity by suggesting the Government is wrong?
This is notwithstanding the fact that virtually everyone from fund executives to financial planning organisations all recognise that early release carries with it more long-term negatives than positives.
And yes, just as suggested by political agent provocateurs such former Financial Services Council (FSC) policy director and now NSW Liberal Senator, Andrew Bragg, the money in members’ accounts does belong to those members and some superannuation funds, particularly those covering the travel and hospitality industries, are going to face serious liquidity issues.
However, for the Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, to suggest that funds covering such industries are guilty of not having ensured greater membership diversity is gratuitous in circumstances where not one single financial services regulator has ever demurred about the merger of superannuation funds covering similar industries. Most often such mergers have been encouraged.
Given the political sensitivity of dealing with the COVID-19 pandemic it is probably little wonder that few, if any, Federal Labor politicians have seen fit to criticise the Government’s approach and comments on superannuation which probably makes it just as well that one of the fathers of the superannuation guarantee (SG), former Prime Minister and Treasurer, Paul Keating, earlier this month saw fit to speak up.
Keating was provoked by suggestions by former Abbott Government National Audit Commission chairman, Tony Shepherd, that the 9.5% SG be suspended over the period of the pandemic.
The former Prime Minister interpreted Shepherd’s proposals as an attempt to permanently eliminate the SG and with it “destroying in Australia the best retirement savings system in the world”.
“In Shepherd’s terms, ruthlessly exploiting a national crisis to secure his own miserable objectives,” Keating wrote.
Nobody ever accused Keating of not having astute and finely-tuned political antennae and it is clear that he recognises that while the Government’s hardship early release of superannuation policy may be a necessary expedient in the face of the COVID-19 pandemic, it should not be allowed to be used as a political Trojan Horse.
The COVID-19 pandemic and the Government’s responses have laid bare many of the failings of the Australian superannuation industry, not the least of which being asset allocation weaknesses and a lack of adequate focus on liquidity. The warnings signs were there during the global financial crisis (GFC) the brutality of the coronavirus has made them real.
It is at such moments that enemies attack and that is why the superannuation industry needs to circle its wagons and mount its defences.