No matter which party wins on 21 August, the superannuation industry should not expect a rapidly changing environment. Much will depend on the make up of the Parliament and the priorities of the Government.
Federal elections are not often won by Oppositions. Mostly, they are lost by incumbent Governments.
At the time of writing, the opinion polls were suggesting the 21 August election would be a close-run affair, but Australian political history suggests the electorate almost always grants first-term Governments a second term.
That being the case, the superannuation industry can look to an element of continuity. However, those expecting that a newly-elected Labor Government will simply take up where it left off may find themselves being rudely surprised.
Two things need to be taken into account. Given his seniority and relative factional influence, Chris Bowen will very likely be elevated to a portfolio well beyond the mid-tier role of Minister for Financial Services, Superannuation and Corporate Law and a new, more junior minister will fill his shoes.
Apart from Bowen, the Australian Labor Party’s most experienced operative in the financial services arena is the current Assistant Treasurer, Senator Nick Sherry, who lost the Financial Services portfolio less than half-way into the Government’s first term. Sherry will be a part of the new Parliament because his Senate term does not expire until 2014.
However, given the negative political assessment that might be applied to reappointing Sherry to the role, it is likely that a re-elected Prime Minister Julia Gillard would opt to appoint a newer face to the portfolio.
In the event that Sherry did find himself again running the financial services portfolio, he would at least have some familiarity with the recommendations of the Cooper Review and the context in which it was established.
It was, after all, Sherry who originally commissioned the Cooper Review and described the context of the exercise as being a bid to “renovate the house”.
His views on whether the Cooper Review recommendations represented a “renovation” or a complete makeover might prove interesting.
Irrespective of who ultimately takes charge of the portfolio, the superannuation industry can be sure that, initially at least, the Government will not move much beyond the implementation of Cooper’s SuperStream recommendations.
Everything else, including MySuper, will be dependent on completing the necessary consultative process and the legislative priorities of a new Government and a new minister.
If a Coalition Government is elected, the superannuation industry can expect that the implementation of the Cooper Review recommendations will likely be confined to SuperStream, with MySuper perhaps being utilised only insofar as it serves to dissolve the default super arrangements that emerged from the modern awards process.
A Coalition Government can also be expected to apply a good deal more scrutiny to the funding of television advertising by industry superannuation funds and the perceived political linkages between industry funds, unions and the Australian Labor Party.
However, as much as the Coalition might find industry funds not to its liking, the experience of the Howard Government’s time in office suggests that it will not move significantly to alter the status quo.
It can, however, be expected to be less enthusiastic about intrafund advice and eliminating commissions from all facets of the financial services industry.
Whichever party gains office on 21 August, they will be confined to just one Parliamentary session before adjourning for the traditional Christmas/New Year recess.
That means whatever changes are ultimately pursued with respect to superannuation are unlikely to occur much before the middle of 2011.
Elections not only have a capacity to change the parties in power, they also change the make-up of Parliaments.
Therefore, the degree to which a re-elected Labor Government is prepared to pursue the harder Cooper Review recommendations will also be dependent upon the balance of power in both the House of Representatives and the Senate.
The bottom line is that, irrespective of the final outcome, the superannuation industry should be prepared to start a whole new ball game after 21 August.