Since the result, all eyes have been on who would be looking after financial services and superannuation and as we now know the appointee is Arthur Sinodinos.
With any change in government there comes renewed optimism and expectation as to what initiatives might be implemented in this sector.
Unfortunately too frequently in the recent past the public has been subjected to change for the wrong reasons, especially when it came to their retirement savings, where the size of the pool of funds involved made it impossible to resist using it for other fiscal and economic objectives.
While some of the final amendments introduced by the former Labor government actually did make sense, such as the new excess contributions tax regime, it seemed to be too little too late.
To me, the ultimate mea culpa was Chris Bowen’s vow not to make any changes to the superannuation rules for the next five years. In making the statement it would appear he seemed to miss the point.
Amendments to the legislation controlling superannuation are not problematic per se. It’s more when these modifications are done for the wrong reasons that things go awry.
So no doubt the industry and the public are hoping Sinodinos will be willing to make changes, but positive ones to encourage the ultimate goal of self-funded retirement.
Already there have been calls for the coalition not to abandon the increase in the superannuation guarantee (SG) from 9 per cent to 12 per cent, which the previous government started to put in motion to help ease the problem with retirement savings adequacy.
This might be a good starting point, but the latest Deloitte report, titled “The Dynamics of the Australian Superannuation System – the next 20 years – 2013-2033”, has indicated men and women would have to contribute 5 per cent and 7.6 per cent above and beyond the 12 per cent SG to have enough money saved to see out their retirement years.
This would be extremely hard to do in the context of the current contributions caps.
As such, perhaps the first priority should be the raising of the contributions caps to at least $50,000 or dare we suggest $100,000.
And if this is considered too bold a move, excluding the SG from the contributions caps calculations would at least be some sort of concession.
This type of change would be, to borrow an old New South Wales Liberal Party slogan, a change for the better and would start the process of properly addressing the problem of adequacy.
So the new government should forget the five-year freeze and show us some positive action in the superannuation arena.
