Senate Select Committee vetoes regulatory path to portability

The Senate Select Committee enquiring into superannuation has sealed the fate of portability regulations, using its majority report to veto the Government’s decision to pursue a regulatory rather than legislative approach.

Instead the majority report recommends the drafting of legislation to allow portability.

The terms of reference for the Committee’s report were to determine the extent to which portability of superannuation benefits already exists, the role of current and likely future barriers to portability such as exit fees and the viability of a set of draft regulations put forward by the Government.

The tenor of the Senate Committee’s report combined with the statements of both the Federal Labor Party Opposition and the Australian Democrats puts beyond doubt that the Senate will move to disallow the portability regulations later this month.

And the vexing element for Assistant Treasurer, Senator Helen Coonan is that while the majority committee report has broadly condemned the portability regulations she gazetted on July 31, the Committee has supported legislating for broadly similar outcomes.

The majority report makes clear that Senators were unimpressed by the Government’s regulatory move in circumstances where it was imposed within weeks of the Committee Report being tabled.

Further, the tenor of the recommendations indicate that a majority of committee members accepted the thrust of late submissions to the enquiry, suggesting that the Government’s regulatory approach would not achieve all the desired outcomes.