The re-election of the coalition government should give superannuants some peace of mind the retirement savings system is entering a period of stability, for a short time anyway.
Yes, we have seen another minister given the responsibility for the superannuation sector in Victorian Senator Jane Hume, but her appointment, at least as far as her credentials go, seems to be a positive one.
The senator’s work experience includes a stint as an investment research manager, time as a private banker with National Australia Bank and a role as Deutsche Bank vice president. This is no guarantee her performance will be outstanding, but at least she has some kind of affinity with the industry.
Further, she has already reiterated Prime Minister Scott Morrison’s pledge while on the campaign trail that there will be no new superannuation taxes imposed by the government.
This is a good start, but I feel the time is ripe for the government to go further and show some true leadership in the retirement savings arena.
I think I can honestly say everyone is sick of the constant changes to the super system, mainly driven by the inability of politicians to keep their grubby hands off the trillions of dollars people have been forced to save since 1993.
Recently, any time a fiscal fix is needed for the budget and the economy, Canberra automatically draws from the superannuation well. It means up until now the politicians have been more than happy to keep the super fiscal safety net within the budgetary cycle just in case of an emergency.
However, if the government is now really committed to a period of superannuation stability, the time has come to remove superannuation from the budget cycle.
You may ask why now compared to any other time. Well, by its own admission, the super reforms introduced by the then-Turnbull government have been disruptive and have caused enough pain, making another change to the system any time soon too harsh.
As Hume said at the recent SMSF + Investor Expo: “We made some quite significant reforms just before I was elected in 2016, we announced those reforms and enacted them soon after returning to parliament, and I think they were disruptive enough for retirees. I don’t think we need to go any further.”
So let’s go the whole hog now and properly commit to no more change for at least the next five years. How would you do that? Well, if the government was to link superannuation reviews to the Intergenerational Report, it would guarantee a period of stability for at least five years.
I did hold a cynical view prior to the election that a Labor government would have instigated this move after it had introduced all of its unpalatable changes, such as the distasteful franking credit policy, enabling the five-year period to embed the measures without question.
But no need for this speculation now. The government has clear air with no changes on the horizon, so as Archie Hamilton’s running coach in the movie Gallipoli said: “Let’s see you do it.”