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Super Needs A Clear Objective: Cooper



A clear objective within superannuation will result in better regulation for all parts of the industry, according to a panel of experts.

Opening the second day of the Self-managed Super Fund Association's national conference in Melbourne this morning, the panel - which included SMSFA chair Deborah Ralston and BT Financial Group chief executive Brad Cooper - discussed the challenges and opportunities before the self-managed super sector.

All participants came to agree that without a clear objective for superannuation, the constant rule changing that occurs in the industry will continue to be in the interests of other areas, not the retirement savings of Australians.

Referring specifically to Labor's proposed franking credit changes - which have been discussed at length throughout the conference - Cooper said Labor's changes aren't being led with a view to meeting a specific objective for superannuation. And that, he said, means lower confidence for retirement savers.

"When people start to prepare for their savings, and for retirement, you want to have confidence that you're participating in a way that the rules are stable, and they're not going to be reversed out on you at some later point," he said.

"That's the big issue around the imputation credit refunds.

"It's hard to see how these changes are improving that outcome. Again, they're frustratingly either ideology led, they're wealth distribution led, or they're budgetary led as opposed to meeting the objective.

"Even if your objective was as simple as supplementing and replacing (the Age Pension) it's very hard to see how these changes are actually assisting the outcome."

Cooper's point came full circle later in the morning as MP's from both sides of parliament had the chance to address delegates with a video message. Tim Wilson and Matt Thistlethwaite both put their arguments forward, but it was Thistlethwaite's message that resonated after the panel's discussion.

The Labor MP said franking credit refunds couldn't continue in their current form because Australia had a "structural problem" with its budget, highlighting Cooper's point.

"It's highlighted by the fact that we have an ageing population," Thistlethwaite said.

He added the population ageing sees pressure put on Australia's healthcare services, pointing out 120,000 Australian's are on the waiting list for aged care places. He said cuts to hospital funding, a Medicare rebate freeze and cuts to school funding justified Labor's position.

"In a country like Australia, if we're going to provide those important services around aged care, and health into the future, we need to make savings within our budget," he said.

"And Labor has proposed to end the cash refund for people who are self-funded retirees in certain circumstances into the future, to raise that additional revenue and to fund those important services."

He added Labor's policy wasn't part of an attack on the SMSF sector, but rather a portion of a suite of changes it was proposing across the wealth management board, including changes to negative gearing and capital gains tax discounts, and reforms to family trusts.

SMSFA chair Deborah Ralston said it was strange that after the Financial System Inquiry in 2014 recommended a clear objective for the aim of the super system be established, it still hadn't occurred.

SMSFA head of policy Jordan George lamented the fact that the idea became fatigued, despite all the sectors various tribes all agreeing something needed to be done.

"Between the industry and Government, Government got worn down in trying to land on the right objective," George said.

"It was one of the few times since I've been in the super industry where you've had the major different parts of the sectors - industry funds, retail funds, SMSFs - all together in a room and all agreeing that we need to proceed with implementing an objective of super.

"But it fell down because the Government and Treasury would not commit to having adequacy as part of the objective."

Source: https://www.financialstandard.com.au/news/super-needs-a-clear-objective-cooper-133238805

By Harrison Worley

Financial Standard

21 February 2019

#SMSF #SelfManagedSuperFund #AgePension #Medicare

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