Referral of the inquiry
1.1
The Treasury Laws Amendment (Your Future, Your Super) Bill 2021 (the bill) was introduced in the House of Representatives and read a first time on 17 February 2021.
1.2
On 18 February 2021, the Senate referred the provisions of the bill to the Senate Economics Legislation Committee (the committee) for inquiry and report by 22 April 2021. The committee agreed to extend the reporting date by one week to 29 April 2021.
Purpose of the Bill
1.3
The bill proposes amendments to the Superannuation Guarantee (Administration) Act 1992 and Superannuation Industry (Supervision) Act 1993 (SIS Act) to 'implement a number of key recommendations from the Productivity Commission [PC] review into superannuation and the 2019 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry [Hayne Royal Commission]'.
1.4
According to the Treasurer, the Hon Josh Frydenberg MP, the bill will reform the operation of the superannuation system in three key ways. It will:
implement a single default account;
address underperformance in superannuation funds; and
amend the 'best interests duty' obligation of superannuation funds.
Background
1.5
The majority of recommendations that inform the bill stem from a soft recommendation of the Financial System Inquiry which led to the PC's superannuation inquiry and, simultaneously, the Hayne Royal Commission.
Financial System Inquiry: end 2013–November 2014
1.6
In late 2013, David Murray AO was appointed Chairman of the Financial System Inquiry (Murray inquiry). The Murray inquiry 'examin[ed] how the financial system could be positioned to best meet Australia's evolving needs and support Australia's economic growth'. In November 2014, the final report was delivered to government making 44 recommendations including six related to superannuation. The final report also suggested that the PC undertake a review into the efficiency and competitiveness of the superannuation system reporting by 2020, following the implementation of MySuper in 2017.
Productivity Commission's superannuation inquiry: July 2017–January 2019
1.7
This suggestion was taken up by the then Treasurer, the Hon Scott Morrison MP requesting the PC undertake the inquiry in July 2017 'to assess the efficiency and competitiveness of Australia's superannuation system and make recommendations to improve outcomes for members and system stability'. Amongst other matters, the PC's final report—presented to Parliament on 10 January 2019—made five recommendations that are similar to the main elements of the bill.
1.8
First is Recommendation 1—default once: only default members without an account; this is reflected in Schedule 1 of the bill on single default accounts:
Default superannuation accounts should only be created for members who are new to the workforce or do not already have a superannuation account (and who do not nominate a fund of their own)…
1.9
Second is Recommendation 4—elevated MySuper and Choice outcomes tests:
The Australian Government should legislate to require all [Australian Prudential and Regulation Authority] APRA-regulated superannuation funds to undertake annual outcomes tests for their MySuper and choice offerings. These outcomes tests should include:
a requirement for funds to obtain independent verification, to an audit-level standard, of their outcomes test determination, at least every three years (starting with the first test)
clear benchmarking requirements for all MySuper and choice investment options…
1.10
The first dot point of the above recommendation 4 is not reflected in the bill. Dot point two specifies what the test should include—benchmark portfolios—and is similar to the Treasury's Your Future Your Super publication. Whereas the bill directs that the annual performance test may include: investment returns, any other matters and be at the discretion of APRA, who is responsible for setting out the test in regulations. The consequences, recommended by the PC for failing a test—a 12-month remediation period or withdrawal from market and prohibited from accepting new members during remediation—are not dissimilar to the bill.
1.11
Third is Recommendation 6—a member-friendly dashboard for all products:
The Australian Government should require funds to publish simple, single-page product dashboards for all superannuation investment options….
1.12
Fourth is Recommendation 7—delivering dashboards to members:
The Australian Government should require the ATO [Australian Taxation Office] to provide a link to the relevant (single page) product dashboard(s) on a member's existing account(s) via its centralised online service. Links to each single-page product dashboards for the 'best in show' products should also be presented on the centralised online service.
1.13
The above Recommendations 6 and 7 basically note the format of the suggested dashboard, its administration and how it should be accessed, whereas the bill, in Schedule 2 focusses on the administrative details of the YourSuper comparison tool which will incorporate information on products, fees, and performance.
1.14
Fifth is Recommendation 22—definition of the best interests duty:
The Australian Government should pursue a clearer articulation of what it means for a trustee to act in members' best interests under the Superannuation Industry (Supervision) Act 1993 (Cth) …
1.15
Schedule 3 of the bill amends the best interests duty by including the wording 'financial' in the duty to clarify that the duty requires trustees act in the 'financial' interests of beneficiaries.
Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry: December 2017–February 2019
1.16
In December 2017, the then Governor‑General, the Hon Sir Peter Cosgrove AK CVO MC, asked the Hon Kenneth Hayne AC QC in Letters Patent to 'inquire into, and report on, whether any conduct of financial services entities might have amounted to misconduct and whether any conduct, practices, behaviour or business activities by those entities fell below community standards and expectations'.
1.17
The Hayne Royal Commission's final report was provided to the Governor General on 1 February 2019 and presented to the Parliament on 4 February 2019. Of the 76 recommendations from the Hayne Royal Commission, one recommendation aligns with the bill: Recommendation 5.5—One default account:
A person should have only one default account. To that end, machinery should be developed for 'stapling' a person to a single account.
1.18
The Commissioner, the Hon Kenneth Hayne, stated:
I pause to note that I agree with the Productivity Commission that default superannuation accounts should only be created for new workers, or workers who do not already have a superannuation account. And that default account should then be carried over, or 'stapled', to members as they move jobs.
1.19
In regards to the best interests duty, Commissioner Hayne commented as follows:
…the existing rules, especially the best interests covenant and the sole purpose test, set the necessary standards. Those standards should be applied according to their terms and without more specific elaboration.
Budget 2020-21
1.20
On 6 October 2021, the Treasurer, the Hon Josh Frydenberg MP, announced a package of superannuation reforms titled 'Your Future, Your Super' as part of the Budget 2020-21. In his speech, Mr Frydenberg focussed on the statistics of the superannuation system—'$3 trillion in the superannuation accounts of Australians…Australians are paying $450 million a year in unnecessary fees as a result of 6 million multiple accounts'—outlined briefly the elements of the package and noted its benefits—'save Australian workers $17.9 billion'.
1.21
Budget Measures Budget Paper No. 2: Superannuation Reform measure notes that:
The Government will provide $159.6 million over four years from 2020-21 to implement reforms to superannuation to improve outcomes for superannuation fund members. The reforms, which will reduce the number of duplicate accounts held by employees as a result of changes in employment and prevent new members joining underperforming funds, include:
The Australian Taxation Office will develop systems so that new employees will be able to select a superannuation product from a table of MySuper products through the YourSuper portal
an existing superannuation account will be 'stapled' to a member to avoid the creation of a new account when that person changes their employment. Future enhancements will enable payroll software developers to build systems to simplify the process of selecting a superannuation product for both employees and employers through automated provision of information to employers
from July 2021 the Australian Prudential Regulation Authority will conduct benchmarking tests on the net investment performance of MySuper products, with products that have underperformed over two consecutive annual tests prohibited from receiving new members until a further annual test that shows they are no longer underperforming. Non-MySuper accumulation products where the decisions of the trustee determine member outcomes will be added from 1 July 2022. The funding for this initiative will be met through an increase in levies on regulated financial institutions
improved transparency and accountability of superannuation funds by strengthening obligations on superannuation trustees to ensure their actions are consistent with members' retirement savings being maximised.
The reforms are expected to result in an increase in taxation receipts.
1.22
The Treasury document Your Future, Your Super: Reforms to make your super work harder for you October 2020 provides further context and detailed information about the Your Future, Your Super package (the package). The government has released both short and long document explaining the package.
Exposure draft consultation: November–December 2020
1.23
Between 26 November 2020 and 24 December 2020, Treasury conducted an exposure draft consultation in the lead up to this bill. Fifty-eight submissions were received—of which three were confidential—including from research centres, consultants, law firms, professional organisations, advocates, not‑for‑profits, industry groups, superannuation funds, unions and individuals.
Suite of superannuation reforms
1.24
It should be noted that the government has implemented a number of reforms to superannuation, and this bill is part of a larger suite of superannuation reforms that the Coalition government has introduced. The committee has reviewed the following superannuation related bills and the Senate Economics References Committee has held the listed superannuation references inquiries during the Coalition government of the 45th and 46th Parliaments:
Superannuation (Excess Transfer Balance Tax) Bill 2016 [Provisions] and Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 [Provisions]—November 2016;
Superannuation (Objective) Bill 2016—February 2017;
Superbad—Wage theft and non-compliance of the Superannuation Guarantee—May 2017;
Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Bill 2017 and the Superannuation Laws Amendment (Strengthening Trustee Arrangements) Bill 2017—October 2017;
Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017 [Provisions]—October 2017;
Treasury Laws Amendment (2018 Measures No. 4) Bill 2018 [Provisions]—June 2018;
Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018 [Provisions]—August 2018;
Treasury Laws Amendment (Putting Members' Interests First) Bill 2019—July 2019;
Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019 [Provisions]—November 2019;
Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 [Provisions]—March 2020; and
Treasury Laws Amendment (Self Managed Superannuation Fund) Bill 2020—November 2020.
Provisions of the bill
Schedule 1—Single default account
1.25
According to the Explanatory Memorandum (EM), the purpose of the single default account is to stop the creation of, and payment of unnecessary fees and insurance premiums on unwanted multiple superannuation accounts that reduce retirement savings of members.
1.26
Schedule 1 introduces stapled funds which amends the choice of fund rule. Regulations are to set out what constitutes a stapled fund. The EM states that regulations on stapled funds will cover:
basic requirements that must be satisfied for a fund to be a stapled fund, including the requirement that the fund is an existing fund of the employee;
tie-breaker rules for selecting a single fund where an employee has multiple existing funds; and
when a fund ceases to be the stapled fund for an employee.
Process for employer determining employee's stapled fund via the ATO
1.27
On commencing a new job, the employer asks the employee—in most instances—to choose the super fund for their superannuation payments to go into and this first step, according to Treasury, remains the same for new employees. It is the second step that differs under the bill; i.e. if an employee does not choose a super fund, the employer is required to obtain information from the ATO to inform them of the super fund that the employee's superannuation payments are to be paid into.
1.28
In general terms the employer is required to contact the ATO requesting if a stapled fund exists and then the ATO is to advise whether or not there is a stapled fund and, if there is, provide the necessary details for the employer to make contributions.
1.29
The employer's request is to be made on the approved form in accordance with any requirements of the regulations.
1.30
If the ATO determines there is no stapled fund for the employee, the employer can make contributions in accordance with default fund, a workplace determination or an Enterprise Agreement made before 1 January 2021.
1.31
At the inquiry's 8 April 2021 public hearing, the Treasury and ATO witnesses provided further information on the process of identifying an employee's stapled fund. The first phase will be an online manual process for employers to obtain information from the ATO about the stapled fund of an employee:
The employer will do this by logging onto ATO online services and entering the employee's details. Once an account has been selected, the employer will pay superannuation contributions into the employee's account.
…
…first phase to be available from the proposed start date of 1 July 2021. That service will be an ATO online service, so basically a digital interaction that's available in the ATO online platforms that we have. An employer would authenticate and log in; they would submit a request for the employee, which would include details of the employee, like their name, date of birth and address; they would submit that request and, if there were sufficient information for us to match and return a result for a staple fund account, that could happen very quickly, within seconds.
1.32
The second phase will be an automated system from 1 July 2022 'giv[ing] employers the option to automate the communications between the employer's payroll system and the ATO system':
The phase 2 service offering is basically an opportunity for digital service providers or payroll software providers to build that service or interaction directly into their payroll software. Effectively, they could submit the request and get the response within their own payroll software without having to leave their payroll software and use an ATO online service that's available through our platforms.
1.33
It is worth highlighting that the second phase is not mentioned in the bill.
Other amendments in Schedule 1
1.34
Schedule 1 also outlines that:
should an employee's interest in a stapled fund transfer to a successor fund the employer is still compliant;
the Commissioner on making guidelines has discretion to reduce an employer's individual superannuation guarantee shortfall for a contribution that was unable to be made;
contributions required by Commonwealth or territory industrial awards or state and territory laws cannot be enforced to the extent that an employer instead makes contributions to a stapled fund; and
Australian Public Service employers are also required to comply with the rule.
Schedule 2 Addressing underperformance in superannuation: Annual performance assessment/test and YourSuper comparison tool
1.35
According to the EM, Schedule 2 amends the SIS Act to require APRA to conduct an annual performance test for MySuper products and other products to be specified in regulations (such as 'trustee directed products' where the trustee has control over the design and implementation of the investment strategy). A trustee providing such products will be required to give notice to beneficiaries who hold a product that has failed the performance test. Where a product has failed the performance test in two consecutive years, the trustee is prohibited from accepting new beneficiaries into that product. APRA may lift the prohibition if circumstances specified in the regulations are satisfied.
1.36
The Treasury's Your Future, Your Super package publication, notes that the purpose of the annual performance test is:
To protect Australians' retirement savings from underperforming superannuation products to maximise their savings for retirement, … ensure funds are maximising net (after fees) investment returns, … hold funds accountable for the outcomes they deliver to members [and] …make members aware when their superannuation product is underperforming.
Defining Part 6A products
1.37
Schedule 2 of the bill inserts a new Part 6A into the SIS Act. The EM states that the new Part 6A provides that:
APRA must conduct an annual performance test, each financial year, on 'Part 6A products';
APRA must notify trustees of the superannuation products of the results of the annual performance test;
Trustees of superannuation products that fail the annual performance test must notify beneficiaries who hold the product, that their product has failed the annual performance test; and
Trustees of superannuation products that fail the annual performance test in two consecutive years are prohibited from accepting new beneficiaries into the superannuation product, unless APRA lifts the prohibition (if circumstances specified in the regulations are satisfied).
1.38
The bill defines a Part 6A product as 'a MySuper product or a class of beneficial interest in a regulated superannuation fund, if that class is identified by regulations made for the purposes of this paragraph'. The EM regularly refers to the second category as 'other products'.
Annual performance assessment/test
1.39
The bill sets out the mechanisms for an annual performance test. It is for APRA to determine each financial year if MySuper and other products have met the annual performance test. The requirements of the annual performance test are to be contained in regulations and may include investment returns and any other matters, plus APRA can exercise its discretion.
1.40
The Treasury's Your Future, Your Super package publication provides further insight on the annual performance test:
The performance test will be based on the methodology adopted by the Productivity Commission and further refined by APRA in its 'Heatmap' analysis (see Appendix 2). This test will:
allow the performance of products to be compared easily as the benchmark is tailored to each product's asset allocation;
be customised to individual products and continue to provide funds with flexibility in constructing their investment portfolio;
assess actual performance, net of fees and taxes; and
be calculated over an eight-year time period that allows funds to target long-term returns and not blame 'one bad year' for underperformance.
…
Each year APRA will construct an individual benchmark for every MySuper product and ['trustee-directed products'] TDPs based on an individual product's portfolio asset allocation, taking into account fees, tax and other relevant assumptions. Each product will then be compared annually against their benchmark.
Products that underperform their net investment return benchmark by 0.5 percentage points per year over an eight-year period will be classified as underperforming. For MySuper products that were in place from 1 July 2014, their first performance test will be based on seven years of performance data. On an ongoing basis the test will apply over an eight year period.
1.41
The test applies to regulated superannuation funds and will not apply to other registrable superannuation entities or self-managed super funds (SMSFs). APRA is to notify the trustees of the outcome of a products test in writing and include a copy of the determination, within the period prescribed by regulations at the end of financial year. In addition, APRA is to publish the test results on its website.
Failing an annual performance test
1.42
In the first instance that a product fails the test, trustees are required to notify beneficiaries via a letter, and where possible electronic communication, that is consistent with the format requirements and contains the information prescribed by the regulations within 28 days of APRA giving notice.
1.43
If in a consecutive year the same product fails the test again, trustees are prohibited from accepting new beneficiaries. The prohibition does not apply in relation to a person who becomes a beneficiary as a result of a payment split within the meaning of the Family Law Act 1975.
1.44
The prohibition on accepting new beneficiaries for failing a consecutive test can be lifted when requirements specified in the regulations are met.
1.45
APRA must notify the Fair Work Commission of a product that: [1] fails consecutively and is prohibited from accepting new members and [2] when a prohibition is lifted.
1.46
APRA will have a resolution planning prudential standard making power to facilitate resolution of the Registrable Superannuation Entity (RSE) licence, registrable superannuation entity or connected entity of an RSE licence 'to best protect the interests of beneficiaries'.
Retrospectivity
1.47
Documents associated with the bill indicate that the test may apply retrospectively. In the PC's report—recommendations from which are implemented in this bill—it is stated:
In light of substantial evidence of underperformance over many years and ongoing harm to members if this is not promptly rectified, the performance threshold [that is the annual performance test] should be applied retrospectively.
1.48
The Treasury's Your Future, Your Super package publication also alludes to retrospectivity:
The first test for MySuper products will see funds that are underperforming need to inform their members of their underperformance by 1 October 2021.
…
[Extract from Case study 1] From 1 July 2021, APRA commences its first performance test and finds that Backhill MySuper has underperformed. APRA informs Backhill Superfund of the assessment and Backhill Superfund has to notify its MySuper members by 1 October 2021.
…
For MySuper products that were in place from 1 July 2014, their first performance test will be based on seven years of performance data. On an ongoing basis the test will apply for an eight year period.
Other amendments in Schedule 2
1.49
In addition Schedule 2 addresses other matters including that:
the regulations may specify that two or more products can be assessed at the same time;
an employer is not in breach of the superannuation guarantee charge when trying to make a contribution to a product that is prohibited provided the contribution is made within 56 days after the end of the quarter;
overriding the rules that require a fund to be the sole eligible choice fund for an employee (ADF Super and PSSap for certain employees) when a product fails the test twice; and
that the results of the annual performance test are to be factored into the annual outcome assessment.
YourSuper comparison tool
1.50
Schedule 2 also sets out the administration of the YourSuper comparison tool. According to the Treasury's Your Future Your Super publication, the purpose of the YourSuper comparison tool is:
To empower members to make their own decision about who manages their retirement savings with simple, clear and trusted information [and]…encourage more competition in the system to lower fees and increase returns for members.
1.51
The bill provides that the ATO has administration over the implementation of the YourSuper comparison tool. To build and inform the tool, APRA will provide the ATO with information in writing (description of ranking MySuper products, information to rank MySuper products) without contravening secrecy provisions. The regulations are to specify one or more formulas that form the basis of ranking products for the YourSuper comparison tool. As soon as practicable, information about MySuper products is to be published on the website. The information can be displayed in response to a query, list of ranked products or by classes of Part 6A products.
1.52
The EM notes that '[t]he ATO's role in maintaining the website does not constitute the provision of financial advice'.
Schedule 3—Best financial interests duty
1.53
According to the EM, the primary purpose of Schedule 3 is to 'amend the SIS Act to require each trustee of a registrable superannuation entity and each trustee of a SMSF to perform the trustee's duties and exercise the trustee's powers in the best financial interests of the beneficiaries'.
Best financial interests duty (BFID)
1.54
The bill inserts the word 'financial' between the best interests duty, making trustees and directors explicitly required to act in the 'best financial interests' of beneficiaries. Failure to comply with the duty draws on the existing civil penalty regime under the SIS Act for section 52 and 52A covenants. A legislative note is included noting that a mental element is not required for a civil offence although proof of dishonesty or intention is required for a criminal offence.
Additional requirements to be compliant with the BFID
1.55
The regulations can set out additional requirements that trustees and directors of trustee companies of registrable superannuation entities are required to comply with to be acting in their best financial interests. Failure to comply with the additional requirements draws on the existing civil penalty regime in the SIS Act and can result in a civil and potentially a criminal penalty where there is dishonesty or intention to deceive or defraud, punishable by a maximum of 2400 penalty units ($532 800 as of 1 July 2020) or a maximum of five years imprisonment, respectively.
BFID applies to trustees of SMSFs
1.56
The best interests duty is also amended for trustees of SMSFs and similarly requires them to act in the 'best financial interests'. The EM notes that '[whilst] there is no penalty if a trustee of a SMSF contravenes the best financial interests duty…[trustees] could be penalised if they also breach other regulatory provisions in the SIS Act'.
BFID applies to third party payments
1.57
By amending the duty, the bill also sets out that trustees and directors of corporate trustees are required to act in the best financial interests when making third party payments.
Prohibition on certain payments and investments
1.58
The regulations can prohibit certain payments and investments by trustees and is to be administered by APRA and the Australian Securities and Investments Commission (ASIC). The prohibition carries a civil penalty provision with civil and criminal consequences when there is dishonesty or intention to deceive or defraud which is punishable by a maximum of five years imprisonment.
Strict liability offence for record keeping
1.59
The bill makes specified record keeping a strict liability offence and it is hoped that it may encourage trustees to keep better records. APRA and ASIC have administration of record keeping obligations. The offence carries a maximum penalty of 50 penalty units. It should be noted that, a contravention of the record keeping obligations (1) or (2A) does not affect the validity of a transaction.
Reversed burden of proof
1.60
The burden of proof is reversed so that trustees are required to prove that they acted in the best financial interests of beneficiaries. This reversal of the burden of proof does not apply to trustees of SMSFs because there is no direct penalty for contravention of the BFID and according to the EM it does not apply to a criminal offence and loss or damage under section 55 of the SIS Act.
Portfolio Holdings Disclosure exemption
1.61
The bill removes an exemption from the portfolio holdings disclosure rules so that trustees are not exempt from disclosing up to five per cent of superannuation holdings.
Commencement
1.62
There are slight variations between the commencement dates of each Schedule of the bill:
Schedule 1—commences the day after this act receives royal assent and applies to employment commencing on 1 July 2021;
Schedule 2—commences the day after this act receives royal assent and applies to MySuper products from 1 July 2021 and other products from 1 July 2022. Part 3 Divisions 1 and 2 commence the later of immediately after the commencement of the provisions covered by table item 3 or immediately after the commencement of Schedule 1 to the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021 or Family Law Amendment (Western Australian De Facto Superannuation Splitting and Bankruptcy) Act 2020, respectively; and
Schedule 3—commences on 1 July 2021.
1.63
According to the Treasury's Your Future, Your Super package, all measures will commence by 1 July 2021, with the exception of the annual performance test to be conducted on trustee-directed products in September 2022.
Legislative scrutiny
1.64
The Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) reported on the bill on 24 February 2021.
1.65
It is the Scrutiny Committee's view that significant matters should be included in primary legislation and is seeking advice from the Treasurer as to why it is considered necessary and appropriate to leave various matters to delegated legislation:
Stapled funds—'basic requirements for a fund to be stapled for an employee';
Annual performance assessment—definition of part 6A product, requirements for the assessment and for lifting a prohibition; and
Best financial interests duty—record keeping standards, additional requirements in relation to the duty and prohibited payments or investments.
1.66
In addition, the Scrutiny Committee asked if the bill could be amended to include at least high-level guidance on all three matters listed above.
1.67
The Scrutiny Committee identified that the annual performance test may apply retrospectively. This observation was made with reference to a section from the Treasury's Your Future, Your Super package publication that is outlined above at paragraph 1.48. The Scrutiny Committee stated 'that the proposed scheme for annual performance assessments may have a retrospective application'. The Scrutiny Committee requested the Treasurer follow this up and in doing so advise 'whether any persons are likely to be adversely affected and the extent to which their interests are likely to be affected'.
1.68
In addition, the Scrutiny Committee was concerned that the EM did not include specific information about the annual performance assessment that was included in the Treasury's Your Future, Your Super package publication and requested that the EM be amended to include the same.
1.69
Finally, the Scrutiny Committee 'considers that it is appropriate that specific consultation obligations (beyond those in the Legislation Act 2003) are included in the bill' and identifies that whilst 'the government intends to undertake consultation before making regulations in relation to paragraphs 52(2)(c) and 52A(2)(c), and proposed subsection 117A(1), the [Scrutiny] committee notes that there is no explicit requirement'.
Financial impact
1.70
According to the EM, 'Schedules 1, 2 and 3 are estimated to have a cost of $46.0 million over the forward estimates period as reported in the 2020-21 Budget measure 'Superannuation Reform'':
Table 1.1:
Cost of the bill over the forward estimates
|
2020-21
|
2021-22
|
2022-23
|
2023-24
|
|
Nil
|
$5.0m
|
$13.0m
|
-64.0m
|
Source: Explanatory Memorandum, p. 4.
1.71
The Budget measure figures also note that the government will provide $159.6 million over the forward estimates to support the measures outlined in the 2020-21 Budget measure description.
Compliance cost impact
1.72
According to the EM, the package 'is estimated to have a total regulatory impact of approximately $5.1 million per year on business'.
Regulation Impact Statement
1.73
The EM refers to the Deputy Secretary of the Markets Group's, Ms Meghan Quinn's, certification that the 'Productivity Commission's review Superannuation: Assessing Efficiency and Competitiveness was a process that provided analysis equivalent to a Regulation Impact Statement (RIS)…and that the review has adequately addressed all seven RIS questions'.
Human rights implications
1.74
The Parliamentary Joint Committee on Human Rights had no comment in relation to the bill 'on the basis that the bill do[es] not engage, or only marginally engage[s], human rights; promote human rights; and/or permissibly limit human rights'.
1.75
The EM considered whether Schedules 2 and 3 of the bill impacted Articles 14 and 15 of the International Covenant on Civil and Political Rights, the right to justice and the right not to be convicted of something that was not a crime when the activity took place, respectively. It was noted that the schedules may engage with an article but do not limit an article to an extent that is not 'reasonable, necessary and proportionate' and therefore are compatible with human rights. According to the EM, 'Schedule [1] does not engage any of the applicable rights or freedoms'.
Conduct of the inquiry
1.76
The committee advertised the inquiry on its website and wrote to relevant stakeholders and interested parties inviting written submissions by 18 March 2021.
1.77
The committee received 42 submissions as well as additional information and answers to questions on notice, which are listed at Appendix 1.
1.78
The committee held two public hearings for the inquiry:
Wednesday 7 April 2021 in Sydney; and
Thursday 8 April 2021 in Melbourne.
1.79
The names of witnesses who appeared at the hearing can be found at Appendix 2.
Structure of the committee's report
1.80
The committee's report comprises of the following chapters;
Chapter 1 provides background and explains the provisions of the bill; and
Chapter 2 outlines the views on the bill by Schedule.
Acknowledgements
1.81
The committee thanks the individuals and organisations who assisted the committee with its inquiry, particularly those that made written submissions and participated in the committee's public hearing.