Elevation of super to Cabinet welcomed

The superannuation industry has broadly welcomed the elevation of the Assistant Treasurer's role from the outer ministry to an inner-Cabinet position.

The Assistant Treasurer's role has sat outside the Cabinet for more than decade and yesterday the Australian Institute of Superannuation Trustees (AIST) chief executive, Tom Garcia, welcomed the fact that superannuation now effectively had a seat at the Cabinet table.

"Elevating the financial services portfolio to Cabinet recognises the key role superannuation plays in the Australian economy," he said.

"We need to get the settings right for all Australians, define clear objectives for super and move to a point where we have a world-class retirement income system that ideally has bi-partisan political support."

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The Association of Superannuation Funds of Australia (ASFA) also welcomed the promotion of Kelly O'Dwyer to the Assistant Treasurer position but chose to point to the policy imperatives confronting the industry.

"Currently, the superannuation system is operating well and broadly meeting its objectives as defined by the Financial System Inquiry — to provide income in retirement to substitute or supplement the Age Pension. However, there is still progress to be made through the implementation of the Financial System Inquiry recommendations and finalisation of the tax white paper process," ASFA chief executive, Pauline Vamos said.

She said her organisation had identified two key areas of reform that could be accomplished through the tax white paper process including that, in order to make the system more equitable, ASFA had proposed limiting tax concessions to those with superannuation balances of over $2.5 million, while simultaneously exploring ways to make the system more fair for those with broken work patterns.

Vamos said ASFA had also called upon the government to legislate the objectives and goals of the superannuation system with a focus on three key areas: ensuring adequate delivery of income stream in retirement; defining the superannuation system's purpose and understanding what ‘success' looks like, and improving the system to better align with the principles and goals that underpin it.

For his part Financial Services Council (FSC) acting chief executive, Andrew Bragg said his organization expected the new Treasury team would hit the ground running to complete the reform agenda established by their predecessors.

"This includes delivering reforms to reduce superannuation fees, concluding the Financial System Inquiry (FSI) and creating more trade opportunities as Asian demand for financial services increases," he said.

"The FSC agrees with the FSI findings that superannuation fees are too high due to a lack of competition and corporate governance in superannuation could be improved."