Financial services industry welcomes super objective consultation

Mike Taylor

Managing Editor/Publisher, Financial Newswire

21 February 2023

The organisation representing Australia’s major life insurers wants insurance inside superannuation to be considered in the context of the objective of superannuation.

The Council of Australian Life Insurers (CALI) has welcomed the Government’s consultation on the objective of superannuation stating that the Australian economy and member outcomes are best served when superannuation is underpinned by life insurance.

“Many Australians will become injured or seriously ill and will not be able to participate fully in an active working life. Having insurance in superannuation means that Australians have a safety net when faced with major illness or disability,” CALI Chief Executive Officer Christine Cupitt said.

Cupitt’s comments came amid broad support from the financial services industry for consultation around the objective of superannuation, particularly with respect to delivering more policy and legislative certainty.

However political fireworks are expected when the Government ultimately moves to legislate the objective of superannuation after reviewing the consultation feedback, particularly because of the position on early-release adopted by the former Morrison coalition government.

Industry superannuation funds groups particularly backed proposals within the consultation paper which would effectively rule-out a repeat of the former Government’s pandemic early-release scheme or the use of superannuation for a home deposit.

Industry funds group, Industry Super Australia (ISA) chief executive, Bernie Dean expressly referred to avoiding “another disaster of allowing people to tap into super early for any reason, which hurts everyone”.

The Financial Services Council (FSC) chief executive, Blake Briggs described the Government’s proposed wording of the purpose of superannuation as heading in the right direction and said that the FSC’s research showed that Australians want a simple definition that speaks to their aspirations and has a singular focus on their retirement.

The SMSF Association welcomed the Government’s decision to open up the objective of superannuation to public consultation with its deputy chief executive, Peter Burgess stating that legislating an objective would provide stability and confidence.

The Association of Superannuation Funds of Australia (ASFA) welcomed the fact that the proposed objective placed preservation, retirement income, equity, sustainability and a dignified retirement at the heart of superannuation policy.

“The Government has proposed an objective that can underpin much needed policy stability and help anchor future policy debates in ensuring our age pension remains affordable, that superannuation savings are preserved to retirement, and that the system delivers in an equitable manner for women and low-income earners,” it said.