Concept of independent Council of Super Custodians revived

Mike Taylor

Managing Editor/Publisher, Financial Newswire

4 April 2023

Just weeks out from the Federal Budget a former industry funds policy adviser has called for the depoliticisation of superannuation and greater clarity around the impact of policy changes around superannuation fund member confidence.

Former Australian Institute of Superannuation Trustees (AIST) adviser, Karen Volpato has made clear in a submission to Treasury’s consultation around the objective of superannuation that it is time to remove superannuation uncertainty from the annual budget process.

As well, and just days after the Government released its consultation paper on reducing superannuation tax concessions for those with balances of $3 million,  Volpato has argued that policies “should be thoroughly road-tested to minimise not properly protecting members.

Volpato has also revived the 2013 suggestion around the creation of a an independent Council of Superannuation Custodians to advise the Government and protect the central tenets of the superannuation system.

“Over this long term, members have consistently given the same feedback: ‘Why does superannuation policy change so much? It worries me – especially on Budget Night!’,” her submission said.

“Superannuation members could be justified in seeing superannuation as politically driven, thereby eroding trust and commitment to long term decisions. At system level, I have witnessed a lack of transparency regarding the effect of policy changes together with – at times – an erosion of member protections.”

“As the OECD notes, ‘… putting pension systems on a solid footing for the future will require painful policy decisions: either asking to pay more in contributions, work longer, or receive less pensions. But these decisions will also be painful because pension reforms are among the most contentious, least popular, and potentially perilous reforms.’  Indeed, rioting about pension ‘reforms’ is occurring in France while I write this submission.”

Volpato said that, on this basis, the question around the objective of superannuation should therefore be: “Will an objective put policymaking on a solid footing based on a clear direction (the ‘objective’) and a map of how to get there and show progress?’ Then, accountability and transparency of Australian’s superannuation policy-making can be improved and recurrent Budget night anxieties could be avoided.”

Volpato said she supported the objective of superannuation as outlined in the Treasury consultation.

“I support that the objective should be enshrined within legislation.  Given that there are many pieces of legislation dealing with superannuation, a separate piece of legislation dealing with the objective would place a proper focus on the objective.

“I recommend that such a separate piece of legislation establish a Council of Superannuation Custodians charged with developing definitions and a means of road-testing proposed policies prior to either implementing proposals or tabling Bills before Parliament,” she said.

“As an alternative to the Council of Superannuation Custodians concept, the separate legislation could place an obligation on the Government of the day to make a Statement of Compatibility.”