The federal government has provided a much needed shot in the arm for retirement incomes reform by announcing it will move quickly on legislating an objective for the $2 trillion superannuation system.
The Committee for Sustainable Retirement Incomes (CSRI), a non-partisan and non-profit body of academic and policy experts, says the announcement by Assistant Treasurer Kelly O’Dwyer of plans to set a goal for super should pave the way for sensible and holistic change.
“Legislating an actual goal for superannuation is well overdue,” said CSRI executive director Patricia Pascuzzo. “Without an agreed guiding principle, the risk was that policymakers kept muddling through, opting for quick fixes geared to the short-term fiscal and political cycle.”
The superannuation system has been the subject of several government enquiries in recent years. While the industry has reached broad agreement on the need to focus the system on generating adequate retirement incomes, governments have been slow to move.
“We’ve had the debate over policy reform to the retirement income system”, said Ms Pascuzzo. “What’s missing now is legislative change that makes the system fair and, equitable, helps people manage financial risk and is fiscally sustainable.”
Assistant Treasurer O’Dwyer has signalled the government is now keen to get on with reform, calling for submissions on a new discussion paper by April 6.
“The fact is if we get agreement on an income goal, all the other issues, like tax, cost and efficiency and default schemes become easier to resolve,” Ms Pascuzzo said. “And if we take a holistic approach, looking at super and the age pension together, we are more likely to improve the system’s overall effectiveness, sustainability and affordability.”