Most Aussies agree with Govt’s objective of super proposal: FSC survey

A majority of Australians have expressed their support for the Government’s proposed wording for the objective of superannuation, results from a new survey by the Financial Services Council (FSC) have revealed.

In a poll of more than 2,500 Australians, more than half (53%) agreed with the Government’s proposed wording for the objective of superannuation. Just 10% disagreed.

Introduced to federal parliament late last year, the stand-alone bill declares, word for word, that the objective of superannuation is “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.

Australia’s $3 trillion superannuation system has previously had no such legislated objective.

FSC chief executive Blake Briggs, on behalf of the financial industry peak body, congratulated the Government on “moving ahead with a simple definition that can be commonly understood by all Australians and that the superannuation industry is unified on”.

“An enshrined objective for superannuation would lead to more stability in policy settings and end the cycle of constant tinkering, which undermines confidence in the system,” Briggs added.

“Once legislated, the objective will help drive the focus of policy reform to address systemic issues, such as including superannuation contributions on Government paid parental leave to help close the gender gap where women retire with 18 per cent less superannuation than men.”

Australia’s industry super funds, as well as the super sector’s peak representative body the Association of Superannuation Funds of Australia (ASFA), have overwhelmingly supported the Government’s move to legislate the objective. They argue that the move will ultimately improve legislators’ accountability and transparency, as well as offer clear and absolute guidelines, in developing super policy.

However, not all have agreed with the wording. In a submission to a senate committee enquiry on the objective bill, independent ‘think tank’ the Grattan Institute slammed the proposed objective as “a recipe for parochial, super-centric policy-making”, believing that the super system should be just one of among several means of supporting Australians’ income requirements in their retirement.

“[Superannuation] accounts for less than half the income that retirees draw on today, and will account for little more than half the income of retirees in future,” Grattan said in its submission.

“Overstating the role of super risks ineffective and costly policies that divert resources and attention away from policies that can better prevent poverty in retirement”.

Briggs, however, stressed that a clearly defined purpose would “give 16 million Australians who are doing the right thing” greater certainty in saving for their own retirement.