Australian superannuation savers can breathe a sigh of relief that Arthur Sinodinos has stood down. Had Sinodinos continued in his role as Assistant Treasurer responsible for superannuation, he would have been distracted and would represent a major threat to superannuation, because Treasury is trying to achieve major changes to super in the budget.
As it happens, the new minister, whoever takes charge of superannuation in Sinodinos’ absence, should start by asking Treasury one simple question: “What is the Australian subsidy for super?”
They will soon discover that Treasury doesn’t know. In the Rudd-Gillard years, Treasury produced false figures, adding two amounts that they were warned not to add. Under Sinodinos, they produced the same figures, and although they didn’t add them, they didn’t warn journalists and commentators not to add them. As a result, uninformed media commentators are claiming superannuation costs $60 billion a year. The figure is probably only 10 per cent of that when you include the saving on government pensions, which Treasury ignores.
With Sinodinos sidelined, it’s likely that major super changes will be on hold until after the budget. By that time, better information will be available.
Arthur Sinodinos was one of the most promising new ministers in the Abbott government. Under pressure from the big institutions, he abandoned the previous government’s taxation on pension superannuation, which contributed to the current uncertainty.
And again, under pressure from banks and institutions, he plans on allowing them to charge commissions for advice. This was a dreadful mistake. Perhaps he was distracted by personal affairs. In any event, Sinodinos should have known better.
As Alan Kohler has previously pointed out, the way to charge for advice is on a cash basis. Most people of repute in the industry understand that. (Financial advisers don't want commissions, March 19.)