Productivity Commission report disappoints
Key sections of the financial services industry have lamented the Productivity Commission's failure to open up the default funds arena to more competition by removing many of the industrial relations elements.
After the Federal Opposition had accused the Minister for Financial Services, Bill Shorten, of unduly influencing the Productivity Commission outcome, the Financial Services Council (FSC) described the final report released on Friday as a "bitter disappointment and missed opportunity".
FSC chief executive John Brogden said, "Default superannuation will remain the domain of the industrial system. Twenty years on nothing will change".
"The Productivity Commission has failed to recognise that superannuation is not an industrial matter," he said. "Superannuation is a financial product and should be adjudicated by Fair Work Australia."
The FSC's concerns were echoed by BT which, while welcoming the Productivity Commission's recognition that the existing system had not been competitive and transparent, said the proposed new system remained a "closed shop".
"It will not give an employer the flexibility to choose the most suitable MySuper default fund for their employees," a BT statement said.
Announcing the release of the Productivity Commission final report into default funds under modern awards, Shorten chose to highlight the recommendation pushing for the setting up of an expert panel within Fair Work Australia for the selection of appropriate default funds.
He said the Government would give careful consideration to the report and provide a detailed and timely response to its recommendations.
On Friday, the Opposition spokesman on Financial Services, Senator Mathias Cormann, claimed an announcement by Shorten ahead of the Productivity Commission final report had "successfully put a stop" to moves towards genuine competition in the default fund space.
Cormann committed a future Coalition Government to addressing the shortcomings he said had been magnified by Shorten's actions.
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