Watchdog for 'tax fiddling'
The Council of Superannuation Custodians, first flagged on Friday, is intended to stop governments from fiddling with tax concessions to fill budget holes or otherwise changing the rules without long notice periods.
The council would act as an independent umpire that would transparently evaluate proposals and publish data on costs and benefits of existing superannuation concessions and any mooted changes.
"We separated monetary policy from the day-to-day of the government and that was a big breakthrough," Mr Shorten said in an interview in Beijing, where he is part of a high-profile Australian delegation led by Prime Minister Julia Gillard.
"We separated the setting of the minimum wage, which still affects one and a half million people," he said. "Let's have a mechanism that takes some of the political capital incentive out of the game. That's the path we're heading down [and] that is genuine reform."
Treasurer Wayne Swan and Mr Shorten announced the proposed council on Friday and said they would ensure future changes were consistent with an agreed Charter of Superannuation Adequacy and Sustainability.
They said the charter would be guided by principles of certainty, adequacy, fairness and sustainability. Details will be developed through an intensive consultation process led by a charter group, to be established in coming weeks.
Mr Shorten's comments are the first to add some detail.
He said the proposal might require three years' notice of tax treatment changes or seven years to change the preservation age.
"You know people just hate changing goal posts, people hate inconsistency, people hate starting one plan and then doing another because the rules change retrospectively," he said. "I'm interested in what superannuation looks like in 2020 for 2040 and what superannuation looks like in 2030 for 2050.
"People say that the Hawke-Keating reforms were then, and now this is now, and it's all different," Mr Shorten said. "Independent monetary policy, independent superannuation policy, I don't think its any different."
Andrea Slattery, representing self-managed superannuation funds, said industry had long called for an independent body that would take policymaking away from short-term fiscal goals.
"We need a bipartisan system that can de-politicise superannuation policy," said Ms Slattery, chief executive of SMSF Professionals' Association of Australia.
She said the proposed council would strengthen the system and focus policymaking on long-term goals "if it's actually introduced".
Frequently Asked Questions about this Article…
The Council of Superannuation Custodians is a proposed Reserve Bank-style, independent body intended to protect retirement savings from short-term political meddling. According to the article, it would act as an independent umpire to transparently evaluate policy proposals and publish data on the costs and benefits of superannuation tax concessions and any proposed changes.
The proposed council was announced by Minister for Financial Services Bill Shorten and Treasurer Wayne Swan. The article also notes the announcement came while Mr Shorten was part of a high-profile Australian delegation led by Prime Minister Julia Gillard.
The council would aim to stop governments from 'fiddling' with tax concessions to fill budget holes or changing rules without long notice. It would transparently evaluate policy changes, publish data on costs and benefits, and provide an independent assessment to reduce retrospective or frequent rule changes that can disrupt long-term retirement planning.
Mr Shorten suggested the proposal might require three years' notice for changes to tax treatment and up to seven years' notice to change the preservation age. These timeframes were presented as possible protections to avoid shifting 'goal posts' for retirees and long-term savers.
Treasurer Wayne Swan and Mr Shorten said future changes would be consistent with an agreed Charter of Superannuation Adequacy and Sustainability. The article says the charter would be guided by principles of certainty, adequacy, fairness and sustainability, with details to be developed through an intensive consultation process led by a charter group.
The council would publish data on the costs and benefits of existing superannuation concessions and any mooted changes, and would transparently evaluate proposals. This public evidence base is intended to make policy impacts clearer to everyday investors and reduce policymaking driven by short-term fiscal goals.
Andrea Slattery, representing self-managed superannuation funds and chief executive of the SMSF Professionals' Association of Australia, said industry has long called for an independent body to take policymaking away from short-term fiscal goals. She said a bipartisan system could de-politicise superannuation policy and strengthen the system if the council is actually introduced.
The article presents the council as a step to separate superannuation policymaking from day-to-day political incentives — likened to separating monetary policy — but it is a proposed reform. It aims to reduce political capital incentives and increase stability and transparency rather than immediately remove all government involvement.
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