It’s too early to tell what the outcome will be for proposed superannuation reform with so many election scenarios still possible, according to several major industry bodies.
Financial Services Council (FSC) chief executive John Brogden said the critical issue now would be how important superannuation was to the three independent MPs, with Greens MP Adam Bandt most likely to support Labor’s proposed reforms including an increase in the superannuation guarantee (SG) to 12 per cent.
“There are any number of scenarios, you could have the independents forming a Government with Labor that doesn’t include the 12 per cent, you could have the independents forming a Government that does include 12 per cent, so it’s too early to say,” he said.
Brogden said it was also important for business to be responsible during this phase of uncertainty and to avoid talking down the market by openly speculating about the negatives of instability and a minority Government.
Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos said it would be difficult for the Labor Party to initiate many of its proposed superannuation changes because so much of the funding for those changes was dependent on the mineral resource rent tax (MRRT).
Much will depend on where the independent MPs stand, but if the Coalition comes into power it would be difficult for it to fund a raft of superannuation upgrades because it has openly opposed the MRRT, Vamos said.
Some issues needed to be resolved sooner rather than later – for example, the contributions caps for people over 50 runs out next year and will need to be extended, Vamos said.
Australian Institute of Superannuation Trustees (AIST) chief executive Fiona Reynolds said that the worst-case scenario for the superannuation industry would be a Coalition win with the abandonment of the SG increase and the gains that have been made on removing commissions.
“We need to wait and see what the outcome is and then restate our case, but let’s hope that we’re not back to where we were three years ago given that we’ve made a whole lot of gains,” Reynolds said.
The best-case scenario for the super industry was that the ALP was returned and that all changes went ahead as planned, she said.
“It’s not just about giving the industry certainty, it’s about giving members certainty in their retirement. We’ve come off the back of so much instability, members want to know they can save for their retirement without the rules changing all the time, and this just leads to more uncertainty and that’s not good for anybody,” she said.
