The Financial Services Council (FSC) has urged the Government to separate defining the purpose of superannuation from the current tax debate, arguing that super should not be defined by short-term considerations.
The FSC’s submission to the Treasury on the objectives of superannuation also makes clear that the objective should be defined in stand-alone legislation and that the relevant minister should be required to issue a “statement of compatibility” when seeking to make legislative changes to the superannuation regime.
However, in arguing that the objective of superannuation should be separated from the current tax debate the FSC appears to have reinforced its view that the Government should not be seeking to use superannuation to fill Budget holes for other short-term purposes.
“The objective of superannuation should have a long-term focus and not be driven by short-term influences, such as the current tax debate,” the submission said. “The FSC supports removing this consultation from the distorting effect of the tax debate and ensuring that any definition of the objective has bi-partisan support and is enduring.”
It said the FSC also recommended the objective of superannuation is enshrined in stand-alone legislation, rather than in existing superannuation law, “as the former provides a single reference point for relevant future changes to superannuation, tax or social security policy”.
It said stand-alone legislation would hard code an agreed definition and place an obligation on the relevant Minister to make a ‘statement of compatibility’ with the objective of the system when legislation is introduced that impacts on the superannuation system.
“The Act would not prescribe what information is necessary for a statement of compatibility, but leave this for the Minister to determine,” the submission said. “This places the onus on external stakeholders to assess the robustness of a statement of compatibility and publicly hold the Government to account for unpersuasive statements.”
