Tick, tock as super faces the inexorable election clock

ANALYSIS

With superannuation likely to be a second or third rank campaign issue in the lead-up to next year’s Federal Election, the Government has not left itself an easy sales pitch.

Yesterday’s announcement by the Treasurer, Jim Chalmers, dealing with reforming the retirement phase of superannuation may have been welcomed by some significant industry stakeholders but it is, frankly, not a barbecue stopper when compared to the Coalition’s continued trumpeting around allowing use of super for home deposits.

What is more, not unlike the Government’s delivery of the Quality of Advice Review (QAR) recommendations via the second tranche of the Delivering Better Financial Outcomes (DBFO) legislative package the outcomes, if any, will likely be post-election.

Allowing for the traditional Christmas/New Year break, we are within six months of the Federal Election.

The dates the Treasurer referenced in his address to the Association of Superannuation Funds of Australia (ASFA) conference were 2025, 2026 and 2027 – in other words the term of the new Parliament which may or may not be controlled by an Australian Labor Party (ALP) Government.

Industry stakeholders such as life insurers and superannuation funds are inevitably polite when senior Government ministers make announcements such as those made by Chalmers yesterday, but there can be no doubt that the superannuation fund lobby is concerned that the Government has not yet navigated legislation enshrining the objective of superannuation into law.

By Chalmer’s own admission, the objective of superannuation legislation is tied up in an increasingly less cooperative Senate. It is likely that it will remain tied up in circumstances where the Federal Opposition sees little benefit with respect to its own policy position on using super for housing.

Then, too, Chalmers told the ASFA conference about the legislation for its better targeted superannuation tax concessions ($3 million tax cap) also needing to navigate the Senate- not an easy task when Senators of all stripes are nervous about the associated taxation of unrealised capital gains.

The bottom line is that the Government inherited the recommendations of the Quality of Advice Review and has delivered only the first tranche of the DBFO legislation while the Retirement Income Covenant was also an inheritance, but it took until December last year before Treasury opened up consultation around superannuation in retirement.

The Government has laid out its agenda around superannuation, retirement and financial advice but it will be up to the Australian electorate to decide whether it gets to deliver it.