Post by bear on Mar 4, 2020 7:15:04 GMT 7
Super industry dominating retirement debate, Grattan Institute warns
The size and dominance of Australia's super funds have prompted concerns that a crucial review into retirement policies could be derailed by too much of a focus on superannuation.
The retirement income review, which is due to present a final report in June, has had a flood of submissions with many focusing on superannuation and the planned rise in the super guarantee, public policy think-tank the Grattan Institute household finances program director Brendan Coates said.
He was concerned that most submissions focused more on super than on the age pension and income support, describing the superannuation sector as a "small part of the whole retirement system". The Grattan submission has suggested raising Newstart, a boost to rent assistance and including more of the home in the means test as options to improve the retirement system overall.
"The super industry has come to dominate the debate about the retirement income system," he said.
"It's a $3 trillion industry. At the time when [former prime minister] Tony Abbott cancelled the last round of increases it was worth $1.5 trillion," he said.
Grattan's submission does not support the currently legislated increase in the super guarantee to 12 per cent, arguing lower-income workers need the money now rather than later and retirees are already not spending their savings. The think-tank also suggests winding back tax breaks on super as half of the benefits flow to the 20 per cent of highest-income earners.
"Raising compulsory super to force people to save more for retirement is a recipe for larger incentives and wealth inequality," Mr Coates said.
"There is a certain irony that it's the political left who are strong supporters of raising the super guarantee. In most countries you'd see that side [keen for] a stronger age pension."
However, Shadow Minister for Financial Services Stephen Jones said it was "time to hit the accelerator not the brakes" on super.
"It's sad that there are still some who want to drag down what is a great national achievement: we've moved from a nation that borrows to a nation that lends and invests; we are the 16th biggest economy but have managed to build the fourth largest pool of superannuation savings in the world."
Liberal Senator James Paterson said he was "personally sceptical" about the increase in the super guarantee to 12 per cent.
"All evidence, from Grattan, the Reserve Bank, ACOSS ... shows it comes at the expense of take-home pay," he said, adding this was hard to justify in a low wage growth environment.
But he was on the fence about whether super funds had too much influence in the debate, saying "yes and no".
"Everyone had a right to voice their opinion, it's up to government to decide what is best for the public."
He questioned the Australian Securities and Investment Commission during a public hearing on Friday over whether Industry Super Australia's decision to splash $3.5 million on an advertising and public relations campaign about the super guarantee changes was an appropriate use of funds. The ads have been running in commercial breaks for hit shows like Nine Entertainment Co's Married At First Sight (Nine is the owner of this masthead) though the spend came from the existing advertising budget.
Industry Super chief executive Bernie Dean said keeping the scheduled increase of the super rate to 12 per cent was a "big deal for the community".
"Members can’t afford to have this review used as an excuse to freeze the super rate, or tear down a system that is already delivering millions of Australians more money than they would have had otherwise for their life in retirement," Mr Dean said.
m.facebook.com/story.php?story_fbid=2618247885111896&id=1415019052101458
www.smh.com.au/politics/federal/super-industry-dominating-retirement-debate-grattan-institute-warns-20200227-p5451d.html
The size and dominance of Australia's super funds have prompted concerns that a crucial review into retirement policies could be derailed by too much of a focus on superannuation.
The retirement income review, which is due to present a final report in June, has had a flood of submissions with many focusing on superannuation and the planned rise in the super guarantee, public policy think-tank the Grattan Institute household finances program director Brendan Coates said.
He was concerned that most submissions focused more on super than on the age pension and income support, describing the superannuation sector as a "small part of the whole retirement system". The Grattan submission has suggested raising Newstart, a boost to rent assistance and including more of the home in the means test as options to improve the retirement system overall.
"The super industry has come to dominate the debate about the retirement income system," he said.
"It's a $3 trillion industry. At the time when [former prime minister] Tony Abbott cancelled the last round of increases it was worth $1.5 trillion," he said.
Grattan's submission does not support the currently legislated increase in the super guarantee to 12 per cent, arguing lower-income workers need the money now rather than later and retirees are already not spending their savings. The think-tank also suggests winding back tax breaks on super as half of the benefits flow to the 20 per cent of highest-income earners.
"Raising compulsory super to force people to save more for retirement is a recipe for larger incentives and wealth inequality," Mr Coates said.
"There is a certain irony that it's the political left who are strong supporters of raising the super guarantee. In most countries you'd see that side [keen for] a stronger age pension."
However, Shadow Minister for Financial Services Stephen Jones said it was "time to hit the accelerator not the brakes" on super.
"It's sad that there are still some who want to drag down what is a great national achievement: we've moved from a nation that borrows to a nation that lends and invests; we are the 16th biggest economy but have managed to build the fourth largest pool of superannuation savings in the world."
Liberal Senator James Paterson said he was "personally sceptical" about the increase in the super guarantee to 12 per cent.
"All evidence, from Grattan, the Reserve Bank, ACOSS ... shows it comes at the expense of take-home pay," he said, adding this was hard to justify in a low wage growth environment.
But he was on the fence about whether super funds had too much influence in the debate, saying "yes and no".
"Everyone had a right to voice their opinion, it's up to government to decide what is best for the public."
He questioned the Australian Securities and Investment Commission during a public hearing on Friday over whether Industry Super Australia's decision to splash $3.5 million on an advertising and public relations campaign about the super guarantee changes was an appropriate use of funds. The ads have been running in commercial breaks for hit shows like Nine Entertainment Co's Married At First Sight (Nine is the owner of this masthead) though the spend came from the existing advertising budget.
Industry Super chief executive Bernie Dean said keeping the scheduled increase of the super rate to 12 per cent was a "big deal for the community".
"Members can’t afford to have this review used as an excuse to freeze the super rate, or tear down a system that is already delivering millions of Australians more money than they would have had otherwise for their life in retirement," Mr Dean said.
m.facebook.com/story.php?story_fbid=2618247885111896&id=1415019052101458
www.smh.com.au/politics/federal/super-industry-dominating-retirement-debate-grattan-institute-warns-20200227-p5451d.html