We are all planning to go to the voting booths in May and if the current opinion polls can be believed, there will be a new government in power in the back half of this year. This means a new person will be responsible for the SMSF sector and that is likely to be Stephen Jones, seeing he is currently the Shadow Assistant Treasurer and Shadow Minister for Financial Services and Superannuation.
So what might he have in store for the space should he get to drop the word ‘shadow’ from his title? Well the year kicked off with an industry function that saw him as the guest speaker and we might have got some indication of things to come.
One message Jones was keen to get out was the fact a Labor government would not dictate how superannuants are able to spend their money. He made this perfectly clear in his criticism of the COVID-19 financial relief measure allowing people the ability to withdraw up to $20,000 of their retirement savings to tide them over during the most trying period of the lockdown. To this end, he was supportive of the initiative but did not like the way it was implemented.
Basically, the Member for Whitlam was opposed to the fact individuals accessing this $20,000 were not limited in what they could spend it on and so there was no guarantee it would be used to support grocery bills and mortgage payments. Having said that, Jones also pointed out he was against dictating how people can invest or spend their superannuation. Conflicting message perhaps, but let’s park this thought for a minute.
Later in his speech Jones indicated Labor would like to see superannuation monies playing a more important role in specific areas of the Australian economy. He said what he meant by this was that initiatives like infrastructure projects did not need to be fully funded by the federal government and retirement savings could be directed to do some of the heavy lifting too.
So what conclusions can we make from his presentation? I might be reading too much into this, but it would appear he would like to place greater measures within the superannuation system to, not quite force, but perhaps direct these monies into a particular direction the government would like.
This is unlikely to mean a portion of a superannuation fund’s portfolio will have to be allocated to this or any other particular asset class, but it might mean trustees will be incentivised to direct some of the money under their control in the appropriate direction.
If this is how a Labor government would go about achieving its vision for how our retirement savings should potentially be used, it would at least be a more palatable solution for SMSFs.
It would mean the fundamental premise of running your own super fund would be left intact, that is, having the ultimate say in where to invest your own money and how to spend it once you are able to draw upon it, incentives or not.
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