Finance chiefs decry super tinkering
The Coalition's plan to defer an increase in the super guarantee is surprising and disappointing, industry executives say, reiterating their calls for stability in the $1.5 trillion sector.
The chief executive of Westpac's wealth arm BT Financial Group, Brad Cooper, said uncertainty over the rules on super added to a lack of engagement by members about their retirement savings.
The managing director and chairman of Vanguard Investments Australia, John James, said the industry suffered from a lack of trust because of changes in rules, needless complexity and the financial crisis.
The Coalition caught the sector off guard last week, saying it planned to defer the increase in the compulsory superannuation guarantee to 12 per cent by two years.
The announcement followed Labor targeting high-income earners' tax concessions, measures the budget said would save about $800 million over four years.
"When the government came out with their announcements in April, I think the overriding sense from people was relief," Mr Cooper told a super industry lunch in Melbourne on Tuesday.
"To be honest, I was a little surprised with the budget response and the Coalition's announcement about delaying by two years the increase in the SG."
Mr Cooper said the focus should be on ensuring that today's 45-year-olds would be able to comfortably retire in 20 years' time.
"From my perspective, that's the lens we should be having around changes to superannuation, and not the budgetary concerns or the political issues of the day," he said.
Mr James said the super system was overly complex and fickle. "There's been so much change in so many years ... If you're a member, the confidence in the system is [an issue] we have to tackle and try and make the complex simple for them."
Mr Cooper said 12 per cent was "about the right number" for compulsory contributions.
Superannuation Minister Bill Shorten said it was "time for the message to go loud and clear to the Abbott conservatives - hands off the superannuation of Australian employees, pass the increases on when they are scheduled to, as you promised to do in February and in March".
But opposition spokesman for superannuation Mathias Cormann has described the decision as part of the Coalition's plan to "deal with the budget emergency".
"To the extent that increased super payments do indeed come out of people's own wages, slowing down the rate of increase will leave people with more of their own money pre-retirement, to pay their mortgage, their electricity bills or, if they so choose, to save more voluntarily through superannuation," Senator Cormann said.