In a joint statement, Treasurer Josh Frydenberg and Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume announced the Government is going forward with the Productivity Commission’s recommendation to establish a review of Australia’s retirement income system.
The review will examine the “three pillars” of retirement in Australia, those being the Age Pension, compulsory superannuation and voluntary savings.
“Through its work,” the joint statement explained, “the review will establish a fact base of the current retirement income system that will improve understanding of its operation and the outcomes it is delivering for Australians.”
Who will lead the review?
As per the statement, the review will be overseen by a three-person panel: former International Monetary Fund executive director Michael Callaghan, Future Fund Board of Guardians member Carolyn Kay and Monash University professional fellow in banking and finance Deborah Ralston.
Regarding the latter appointee, Shadow Treasurer Jim Chalmers argued Ralston’s position as the chair of the Alliance for a Fairer Retirement (AFR), which opposed Labor’s controversial franking credits proposal, suggests the Government is “obviously not interested in bipartisanship.” (Ralston has since resigned from her position as chair of AFR.)
What will be examined?
As above, the review will determine the propensity for the “three pillars” of Australia’s retirement system to “achieve adequate retirement incomes, [remain] fiscally sustainable and [provide] appropriate incentives for self-provision in retirement.”
The review will also look at “distributional impacts across the population and over time” and “the impact of current policy settings on public finances.”
A point of contention across the political spectrum – and within the retirement income industry – is the potential to overturn the legislated increase in the superannuation guarantee to 10% by 2021 and 12% thereafter.
There were also concerns voiced by the Association of Independent Retirees, whose director, Terry O’Callaghan, said: “Changing the ‘goal posts’ on legislative arrangements for Australians who have already retired and are partly or fully self-funding their retirement, should not be an option for the Review.”
Whatever the review recommends, it’s likely we haven’t seen the end of reforms to Australia’s superannuation system.
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