Single super aim would allow policy testing

Opposition treasury spokesman Chris Bowen.


By Krystine Lumanta

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Opposition treasury spokesman Chris Bowen has backed a key Financial System Inquiry (FSI) recommendation to establish a clear objective for superannuation as it would allow future policy ideas to be tested and measured against it.

“I found this recommendation arresting in its simplicity,” Bowen told the Centre for International Finance and Regulation FSI Workshop in Sydney yesterday.

“Many people would think that super already has an agreed objective, but actually it doesn’t or perhaps the problem is that everyone has got their own.

“It’s natural enough when we have an asset like superannuation, which is now worth more than our annual gross domestic product, that plenty of people … want to use it for one purpose or another.”

While it was positive that more super funds were investing in infrastructure, for example, it was not the purpose of super, he said.

“Likewise having more funds under management through super has reduced the cost of capital in Australia and helped us during the global financial crisis – it’s a good thing but it’s a bonus,” he said, adding such examples should never be the objective of super.

“Having an agreed and simple objective would mean that progress could be measured against that objective, and it would also mean any policy ideas could be tested against the criteria of whether they meet that objective.

“So I’m in favour of an agreed objective for the super system and I’m more than happy to invest the time and effort to see if we can make that objective bipartisan.”

He said the superannuation system should ensure as many Australians as possible had access to the resources for a dignified retirement without recourse to the full age pension.

However, in response to Treasurer Joe Hockey’s comments last weekend that he was open to allowing Australians to access their super for housing deposits and job retraining, he said the proposal was “disastrous” as it would undermine retirement incomes and worsen housing affordability.

He said while the Labor Party would not agree with every FSI recommendation, there should be a genuine attempt at bipartisanship.

“As far as possible, issues in relation to prudential and financial regulation should not be a political football,” he said.

“It’s important for confidence in our financial system that there is a degree of bipartisanship when it comes to prudential regulation.”

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