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Supplementary Report by Labor Members
Labor members of the committee generally
believe the overall governance regime of Australia's superannuation system is very sound. Since
the introduction of compulsion by the Hawk/Keating Government in 1987 the sizes
of the industry and funds saved have increased dramatically and it has been
governed through the trustee system in a sound and effective manner. The
Superannuation Industry Supervision (SIS) Act and other regulatory improvements
over the past 20 years have operated very well.
Nevertheless
there can be improvements in some key areas as follows;
- key
data including international comparison needs improvement;
- much
existing law and regulation could be consolidated and simplified;
- the
total number of accounts at 30 million with 5.7 million declared lost is a very
significant structural failure;
- compensation
in the event of theft and fraud and employer insolvency, although small in the
context of the total system, significantly harm the individuals impacted on; and
- there
is still significant room for improvement in the self-managed fund sector where
issues of governance, regulation and information require upgrading.
Accordingly Labor members agree with most of
the recommendations with the following exceptions:
Recommendation
6
Most industry funds publicly tender key service
provisions overseen by APRA. This may include in some cases benchmarking of partly
or fully owned entities. The requirement, as the recommendation suggests, that
all entities such as retail, corporate, small and self managed have competitive
public tender for all aspects of their business is both impractical and
unnecessary interference in the internal commercial operation of business.
Labor members fund it surprising that Liberal members of the committee would
support such an approach.
Recommendation
13
Compulsory unit pricing for all public offer
superannuation funds is not necessary. This is a commercial decision to be made
by the business not imposed by government.
Recommendation
14
Labor believes these aspects of salary
sacrifice should be implemented not investigated. Further Labor believes that
improvement in compensation in the event of theft and fraud and losses when an
employer is insolvent of compulsory super guarantee (SG) is necessary.
Recommendation
28 and 31
These recommendations deal with the operation
of self managed funds. Number 28 recommends raising the members of trustees
from 4 to 10. This would see their operational use expand significantly beyond
the traditional family. Given the current difficulties of governance in the
sector, the rapid growth in the sector generally (4 is therefore not generally
inhibiting) and lack of general support for this change the current numbers
should be maintained.
Number 31 recommends yet a further extension of
exemptions for accountants from regulation on giving advice on self-managed
super funds. Whatever the level and detail of regulation in the SMSF sector, it
should be a level playing field applying equally to all. One group, in this case
accountants, should not be favoured over planners and others who advise in this
sector.
Finally whilst Labor is generally supportive of
the report and recommendations contained with some exceptions, it was
disappointed at the over emphasis by the chair, Senator Chapman, on his dispute with Mr Garry Weaven. To reference a non
response to questions is appropriate, however to attach as an appendix Hansard
exchanges from 2004 on related matters detracts from the generally balanced
consideration of the issues by the committee and report as a whole.
Ms Anna Burke
Deputy Chair |
Senator the Hon Nick Sherry |
| |
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| Mr Chris Bowen MP |
Senator Penny Wong |
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