On 20 February 2023, the Federal Treasurer, Jim Chalmers, and the Assistant Treasurer and Minister for Financial Services Minister, Stephen Jones, issued a joint media release and a consultation paper on the objective of superannuation. In this paper, the Government has proposed that the objective of super be as follows:
“The objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
The objective of superannuation is important, and this has been an issue that the Parliament and various Governments have discussed and consulted on over a long period of time. Establishing an objective for super was a recommendation of the 2014 Financial System Inquiry and the subject of a 2016 Bill that ultimately lapsed.
This is an important debate, which needs to be carefully worked through to ensure that it covers all the relevant purposes for superannuation, including those related to life insurance, and the payment of benefits to those who experience a claims event prior to retirement age.
Part of the argument for defining an objective for super is to facilitate a more stable regulatory regime for super, to give consumers greater confidence to put money into super. There has also been ongoing commentary on how superannuation should not be used as a vehicle for intergenerational wealth transfer. The objective will play an important role in future debates.
Submissions on this consultation paper are due by 31 March 2023. Members are encouraged to provide any feedback to firstname.lastname@example.org.