Speaking with one voice – Round table

Is the superannuation industry capable of speaking with one voice, or will sectional interests preval?

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MT: I am suspecting that what you mean about the industry speaking with one voice is that you’d really like for SMSF, industry funds, retail master trusts and everything else to be on the same page and organisations and everybody else in the industry, the FPA, the AFA, whoever to be singing a simpler song when they talk to Canberra, which seems to me to be a very optimistic point of view. What was your intention there Andrea?

AS: My intention there was for that very purpose that at the higher level goals, particularly around things like tax concessions, superannuation, financial advice, professionalism, at least in those areas if not more, we should have one voice. If we don’t have one voice, then there’s anability for the factions to actually take a stand, which actually allows the entire industry to be targeted successfully. And for the whole concept of superannuation being a primary savings vehicle in Australia, the whole concept of that then is undermined.

So we really do need to work together, pull together, not everybody is going to have one voice when it comes to the smaller issues or the sectoral issues. But we need to have the one voice from all of those areas, we need to confirm the objective, we need to confirm and have a single voice around the tax concessions. We need to confirm and have single voice that there are professions and those professions need to work. We need to confirm that the consumers are at the heart of appropriate advice and they must have confidence in the system.

The consumers have a complete lack of confidence, because of the factional and political point scoring that’s occurring now. And if we don’t pull together with one voice, with one intention at that higher level, then it’s going to continue. There’ll be a lack of confidence, the governments will continue to say well it can be in a short term budgetary cycle, we can actually attack it and other sectors of our community can continually use the superannuation sector as the honey pot.

PH: I have no doubt that if you sat down and went across all those associations, on the topic of superannuation you’d actually have a great deal of commonality and a potential to kind of document an actually we all agree, we are all in unison on some of the, on the majority of the big ticket items.

To be out there in a coordinated way I think would be enormously helpful. That would mean you’d actually have to agree on some common language, so that the message keeps getting delivered in the same way.

I suspect the differences are relatively minor. When we’re talking about superannuation until you get out to the very end of specific advice models to consumer, we should be able to sing from a very common hymn book and it would be compelling and it would be necessary to counter the extent of voice, because Michael’s right and Phil it’s a very powerful voice that a minority interest can raise today, it can be very loud, very quickly.

MH: I suppose if there’s going to be a review it’ll have the greatest impact if there’s commonality and support by all, all the associations within the sectors. So it’s probably a bit of focusing on what everyone agrees with and then politely ignoring those areas which are subject to disagreement.

AG: Well I think sometimes people focus a lot in commentary on differences, but the reality is and especially in the context of the Tax White Paper and talking about the superannuation industry there are, as Paul says, very large areas of commonality of thought.

So if you start working through them. First of all the basic structure between pillar one, the social security system, pillar two the mandated contributions, pillar three voluntary contributions, there’s broad agreement around that. There’s broad agreement around the vital importance and increasing importance of the post retirement sector and having policy settings in terms of concessions on investment earnings and social security treatment and the like. There’s broad agreement around what’s a consistent set of principles there. If you think about the accumulation phase and some of the concessions, including concessional contributions, there’s broad agreement there. A recognition that you need to have for example appropriate levels of caps to allow for people, especially in their 50s if they want to accelerate some of their savings towards retirement, there’s broad agreement on those.

So if you actually work through the big picture issues, whilst there might be sectoral interest, across the board I think there’s broad agreement on those and that does lay the platform for a unified voice if people can be mature about it.

PL: Yes I think it is true, there’s probably much more shall we say sameness or commonality than there are differences. Unfortunately there always have been differences which get all the focus and be that as you say the sectoral elements.

It’s going to take leadership from or agreed leadership from the various bodies to actually make that happen. And I think that’s certainly something I know Andrea has always been trying to do. And it needs to continue, because if we don’t get that as we said, we know that there’s enough other groups that will utilise or want to utilise the super concessions to get something else by ramming those ones down. And we don’t really see that that’s necessarily an appropriate outcome. So yeah I guess the question is will all the bodies come to the party?

For more from this round table meeting, see part one – Reinterpreting the cost of tax concessions – Round Table – part two – Is policy stability achievable? – Round table – and part four – Spruikers, not LRBAs the problem – Round table.