Many crossbench MPs have publicly rejected the Your Future, Your Super reforms, arguing that the ‘directions power’ – which ultimately allows the government to veto any investment made by a fund – will have to be tweaked.
Described as an “investment kill switch” by Labor, crossbenchers now look set to support the opposition as it moves to veto the bill in its current form. And while Labor does not want to bin the planned reforms, it wants its worse elements tweaked.
But Minister for Superannuation Jane Hume is confident the government has the numbers to see the legislation through.
“We think that it will definitely pass because I think people realise that the most important thing that we can do is make sure that your super fund follows you throughout your super life, that it’s much easier to choose between funds, that funds are made accountable for their underperformance and there’s a greater level of transparency and accountability by superannuation fund trustees,” Ms Hume said in an interview with Sky News on Wednesday.
Noting that super is no longer a “cottage industry”, Ms Hume pointed to the latest data released by the Australian Prudential Regulation Authority (APRA), which revealed that superannuation assets under management surpassed $3 trillion at the end of March.
“Well, it’s certainly not a cottage industry anymore; $3.1 trillion under management, around $30 billion a year is paid in fees. That’s more than Australians pay in electricity bills and other power bills combined. So, that’s why it’s so important that we pass the Your Future, Your Super legislation as soon as possible, to make sure that this is an efficient system that’s serving members rather than funds,” Ms Hume said.
With former Liberal MP Craig Kelly defecting to the crossbench in February, before citing problems with parts of the government’s super plan, the Morrison government is expected to struggle to garner the numbers. But Ms Hume confirmed that conversation have been had with Mr Kelly, as well as other crossbenchers.
“Well, we’ve certainly spoken – we’ve had conversations with all of the crossbench, as we do with all superannuation legislation. Superannuation is a highly contested area, always has been. I do not think that we’ve passed a single superannuation bill in the last couple of years that hasn’t been contested, but, that said, it’s also quite complicated and it’s important that we can speak to each of the crossbenchers and clarify their concerns.
“We’ve done that already with some of them, and we’ll continue to do that if they have continued concerns, but I have no doubt that we’ll pass these reforms because it is so important to do so,” Ms Hume said.
Defending the directions power, Ms Hume noted that “there are similar sorts of powers in all sorts of areas of legislation”.
“For instance, a board of trustees decides that an overseas junket is an appropriate use of members’ funds or sponsoring a little league is an appropriate use of members’ funds. Knowing that they can only spend members money, that every dollar that they spend is someone’s retirement savings, is that an appropriate area?
“We want to have that very last‑resort power to say, ‘No, that category of expenditure is inappropriate or that category of investment is inappropriate’, just to give APRA the enforcement power that it needs to make sure that every dollar is spent with members’ interests in mind,” Ms Hume said.
