The Federal Opposition has sent a clear message to the Productivity Commission (PC) that it will not be swayed by suggestions of utilising a Top 10 “Best on Show” approach as a replacement for superannuation default funds.
The Shadow Treasurer, Chris Bowen said that while the Federal Opposition was conscious of the need to protect default superannuation fund members from sub-par results, it was concerned about the probably unintended consequences.
Further, he said there was a danger that were the Government to adopt the approach being suggested by the PC risked the changes being woven into the system over the long term and the consequences could be significant.
Bowen said that among the unintended consequences could be a diminution of competition and that competition had to be the guiding principal of the superannuation regime.
“Anything that dampens competition would not be in members’ best interests,” he said.
Elsewhere in his address to the Financial Services Council (FSC) Leaders Forum in Melbourne, Bowen said that a future Labor Government would not favour factions or groups in the superannuation industry, because it believed the interests of members trumped ideology.
However he expressed concern at legislation currently before the Parliament and currently the subject of a review by the Senate Economics Legislation Committee aimed at low balance superannuation accounts and making insurance inside superannuation ‘opt-in’ for under 25s.
He said the Opposition was open to capping fees on low balance accounts but remained to be convinced about the insurance inside superannuation options
