The Minister for Financial Services Joe Hockey has labelled the superannuation surcharge as a bad tax but says it was necessary to cover some budget shortfalls inherited from the previous government.
In an interview withMoney Management, Hockey says the surcharge was widely seen as a complicated tax.
“But people need to understand that the reason we have this is that Labor left us with a massive budget black hole,” Hockey says.
“It is a bad tax, it is costly to comply with, but we had no choice but to introduce it.”
Despite this, Hockey says the Government will not be radically altering the nature of superannuation if they are returned after the next election. However it would consider introducing a number of key changes as part of a review of the prudential supervision of superannuation.
These include tougher disclosure provisions, the holding of annual general meetings, greater fund transparency and mechanisms to allow the removal of directors and investment managers.
The aim of this, according to Hockey, is to make superannuation a safer proposition for the many Australians who use the funds.
“Superannuation needs some certainty and this is something which should be discussed on a broader scale,” Hockey says.
Whether this includes increasing the funding for the superannuation regulator, the Australian Prudential Regulatory Authority (APRA), Hockey says that both it and the financial services regulator, the Australian Securities and Investments Commission (ASIC) are adequately funded.
“We are increasing funding already but there are demands on the funds the Government can give and there is a limit on what regulators can do. They cannot prevent bad practice but rather dissuade it from happening,” Hockey says.
