Industry jumps on super strategy

Treasurer Peter Costello’s mention of the “s” word following his budget address has brought a chorus of approval and demands from the financial services industry.

Treasurer Peter Costello’s mention of the “s” word following his budget address has brought a chorus of approval and demands from the financial services industry.

Costello told the Press Club in Canberra that the Government is committed to a major review of superannuation in a bid to simplify the system.

Industry groups have welcomed the government’s apparent support for a shake-up of super, but many are lobbying to speed up the process or to widen the terms of the review to focus on national savings.

The Australian Retirement Income Streams Association (ARISA) has called for a two stage reform process.

ARISA chairman Tony Negline says reform should initially focus on simplifying super regulation and then draw up a plan to promote national savings.

“ARISA believes the current superannuation and social security system needs sim-plication which in turn will lead to lower administration costs and more competi-tion,” he says.

“We believe that all parties should be developing policies which outline a national savings agenda, including pre and post retirement issues.”

In particular, ARISA pinpointed super contributions, eligible termination payments (ETPs) and reasonable benefit limits for particular treatment.

ARISA also believes the review of superannuation should involve all financial services, not just those directly associated with superannuation.

“We call on Government to also consult with groups representing financial plan-ners, accountants, lawyers, consumers and retirees,” Negline says.

Other superannuation associations have called on the government to accelerate the review process. Association of Superannuation Funds of Australia chief executive Philippa Smith says the movement of baby boomers into retirement in the near fu-ture should prompt the government into action.

“The Treasurer should be applauded for publicly recognising the need for reform in superannuation, but putting it off until ‘somewhere down the track’ would be a mistake,” she says.

“Many babyboomers are staring down the barrel of 20-plus years of paltry retire-ment. Improved saving is needed now to avert this.”

Meanwhile, the Australian Institute of Superannuation Trustee’s (AIST) newly anointed president Susan Ryan has called on the Government to give people incen-tives for voluntary contribution to superannuation.