ASFA battles super change

by |
The Association of Superannuation Funds of Australia is having an active week campaigning on behalf of the country’s superannuation industry.

The superannuation advocacy group is calling for any debate on super tax concessions to be based on accurate information regarding the actual value and context of concessions.

Some media outlets reported yesterday that tax concessions applied to super will cost the Budget up to $32 billion this year.

But analysing the tax concessions applied to super is not as simple as just looking at the Tax Expenditure Statement, said ASFA CEO Pauline Vamos.

“It's important that all relevant factors are taken into account, to generate a more accurate picture of the incentives the Government provides to help people save for their retirement. The bottom line is the system is sustainable for the medium-term so there is time to have a measured and informed debate."

This includes taking into account that the Government is currently saving $7 billion annually in Age Pension expenditures as a result of super, she said.

Another super issue which ASFA is campaigning about is Australian Securities and Investments Commission’s proposed requirement that certain documents be updated on superannuation fund websites on the same day they are distributed to Australian Prudential Regulation Authority.

This is too strict, ASFA believes.

ASFA supports the proposed seven-day and 14-day requirements for updating certain matters, but thinks the same-day requirement for product disclosure statements, financial services guides, annual reports and financial statements is impracticable, it said in response to an ASIC consultation paper.

The superannuation advocacy body is also worried the status quo of having no formal governance arrangements in place for SuperStream could put the whole planned superannuation reform in danger.  

On Friday Assistant Treasurer Arthur Sinodinos announced he was “streamlining” the SuperStream consultation process and so disbanded the SuperStream Advisory Council, Superannuation Advisory Committee and the Superannuation Roundtable, as their consultation work is finished.

The SuperStream project is going ahead and remaining issues are being taken up by forums chaired by the Australian Taxation Office, he said.

But Vamos said this lack of gateway governance could “jeopardise” the effective delivery of the SuperStream reforms.

"SuperStream will be a game changer…However, we are concerned that without direct and immediate Government management – through the ATO – of the superannuation transaction network of gateways, the SuperStream vision will not be delivered.”

Currently there are no formal governance arrangements in place for the gateway network. The process for accepting new gateways into the network and gateway technical capability certification is also not established, according to ASFA.

The Government needs to “urgently” address the issue, otherwise a smooth delivery of SuperStream for employers and fund members is unlikely, Vamos said.

Vamos believes putting appropriate governance in place – by extending ATO’s regulatory reach on superannuation data and payments to gateways which are part of the SuperStream transaction network – could happen with no impact on the Budget bottom line.

"The industry has already invested considerable resources in SuperStream, and we believe any extension of the ATO's operations could be funded from the existing levy."

In its superannuation election policy, released in September 2013, the Abbott Government prioritised the superannuation industry efficiency reforms – SuperStream – which will let Australians consolidate superannuation and help employers make superannuation contributions with other payments.

The Government said last week it is still committed to SuperStream and the ATO will work closely with superannuation funds, fund administrators, employers, and software developers as the reforms continue to be put in place.

At the end of November, Treasury released a superannuation discussion paper, to which comments can be submitted until 12 February.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions