Introduction
I would like to acknowledge the Gadigal people of the Eora Nation as the traditional custodians of the land we are meeting on.
I pay my respects to their Elders past and present, and I acknowledge any First Nations Australians in attendance.
At this very forum 2 years ago, I made a promise –
A promise that the Albanese government will deliver a stronger superannuation system that provides the best outcomes for members.
A stronger system where workers are paid what they are owed.
A system where funds deliver strong investment performance.
A system where the member is at the centre.
A system that is fair.
On current trends, the superannuation sector will exceed $4 trillion in the next term of government.
As the stewards of the system, we are committed to ensuring that translates to a dignified retirement for all Australians.
To do that, we have been improving every interaction with the system.
From the first dollar of superannuation accumulated –
To the final dollar drawn down –
We want to ensure Australians share in the dividend of the nation’s prosperity.
Every dollar of superannuation needs to be paid
Superannuation relies on the premise that wealth will accumulate over your working life to be drawn down upon in retirement.
This all falls over from the outset if workers are not paid what they are owed.
In the most recent data available, in a single year, it is estimated that workers had $3.6 billion stolen from them through unpaid super.
Not good enough.
We don’t accept workers being underpaid wages.
We shouldn’t accept workers being underpaid super.
So we have acted decisively.
We enshrined the right to super in the ³Ô¹ÏÍøÕ¾ Employment Standards.
We’ve criminalised the theft of superannuation.
And we’re fulfilling our election commitment to set new targets for the Tax Office to recover unpaid super.
Yet the most important policy in this regard is our commitment to payday super.
From 1 July 2026, employers will be required to pay their employees’ super at the same time as their salary and wages.
Workers will benefit by getting their super earlier and more frequently.
The Tax Office will have greater ability to track employers meeting their obligations.
And it will help prevent the build‑up of debts of unpaid super, which are too often lost forever if a business becomes insolvent.
This is one of the biggest reforms to the payment of superannuation since it was introduced over 30 years ago.
And it will deliver for workers.
Funds must deliver strong investment returns
We need to make sure super is paid on time.
And we need to make sure super is invested in the best financial interests of members.
Upon coming to government, the annual superannuation performance test only applied to around 70 MySuper products.
It has now been expanded to around 650 products, including the choice sector.
The test now covers around 80 per cent of benefits held in the accumulation phase.
This drives accountability for trustees to deliver good investment returns.
And it delivers transparency for members to know how their fund is performing.
And it’s working.
The tail of underperformance is being cleaned up.
After almost 100 products failed last year, that number is down to 37 this year.
But this is not a policy that is set and forget.
We have had a look under the hood of the test to ensure that it is delivering for members.
That it is not limiting the returns that funds can achieve.
And to ensure that it is fit‑for‑purpose as the system continues to mature.
As we work through the views and feedback we have received, you can judge our record to decipher what the future of the test looks like.
How do we ensure funds invest in the best financial interests of members.
And how do we help more Australians retire with dignity.
Superannuation will be increasingly judged by its member service
Now for a long time, the superannuation system has been judged simply by how well it accumulates wealth.
And this is a key metric for its success.
A metric – might I add – that it has generally hit out of the park.
But more and more, this is not going to be the only marker against which success is judged.
The superannuation industry will be judged by the standard of member service received throughout a person’s working life and retirement.
And members are not judging their superannuation fund against another fund.
They’re judging their fund against the service they receive from their bank or their insurer.
And if they don’t receive an acceptable level of service, members might just start to question the value proposition of superannuation.
There are plenty of bad answers to the question of what superannuation should be used for.
In fact, you can spot these bad ideas when they put forward an answer that is anything but retirement income.
In recent weeks, the Opposition have revealed their true colours when it comes to the superannuation system.
The Shadow Treasurer let the cat out of the bag – they don’t believe in a universal superannuation system.
And they don’t want superannuation to be kept for retirement as they continue to promote using super to buy a house.
It’s an idea that is both bad retirement policy and bad housing policy.
The entry price for a good idea is that it has to work.
But this one doesn’t build a single home.
And in a supply‑constrained market, it will only push house prices up and up.
Their sales pitch to a young person is to drain your super, while pushing home ownership further away.
And housing is just the tip of the iceberg.
There is not a policy problem that the Opposition believe can’t be met by ripping open super.
Like when they encouraged $38 billion in retirement savings to be drained during the pandemic.
However, if the superannuation system doesn’t meet the members’ needs, these ideas become more attractive.
Let’s be clear – the expectation on funds is only going to increase.
The government has made its views clear.
And this is a key strategic priority for ASIC as well and they will continue to work across industry to hold funds to account.
Members are going to want help to meet their retirement goals.
To be in the right products.
And to be supported when things go wrong.
Upon coming to government, the standard was not good enough.
Pleasingly, this has started to turn around as funds have dedicated time and resources to lifting their performance.
And I welcome the recent guidance note that ASFA has published –
And I acknowledge the collaboration from others in the sector, including the Super Members Council and Financial Services Council.
This is trending in the right direction, with more to be done to serve the members of the system.
Reforming the financial advice laws will improve member outcomes
While superannuation funds can do a lot more to meet their members’ expectations and needs –
There is one area of the law that funds have almost unanimously said is holding them back and leading to bad outcomes for members.
The financial advice laws in the country are not fit‑for‑purpose.
It’s too expensive.
Too hard to access.
And too strangled by red tape to be helpful.
4 in 5 Australians aged 45 to 54 said they needed financial advice, but did not have the capacity to pay for it.
74 per cent of Australians aged 18 to 34 have been found to have unmet advice needs.
Funds have to hang up on members or turn them away because the laws prevent them from providing answers to, often, simple questions.
This means members might get no advice or information, which means they are likely not able to maximise their savings.
Treasury analysis shows around 50 per cent of accounts have a balance of at least $100,000 in the year before a person’s passing.
But worse still, if members cannot get advice from regulated sources, they may be led by ‘finfluencers’ and ‘armchair’ commentators to expose themselves to the dangerous world of scammers.
No one can defend the current financial advice laws when presented with these outcomes.
This is an acute challenge for the superannuation industry.
We have over 5 million Australians at or approaching retirement.
And they are hungry for advice and information.
And so we have set out to implement the most significant reforms to the financial advice laws in a decade.
We are committed to improving the retirement phase of superannuation.
And the foundation stone for this project is helping more Australians access quality and affordable financial advice.
We have delivered the first tranche of reforms.
And the next tranche of reforms is being drafted and prepared for introduction.
In this tranche of reforms, we will modernise the best interests duty and remove the safe harbour steps.
We will reform statements of advice so that they are actually usable by the consumer who paid for it to make informed decisions.
And we will create a new class of adviser who will be able to provide simple and safe advice.
Advice will be safe – so that we protect Australians from bad advice.
Advice will be helpful – so that it is useful and fit‑for‑purpose.
And advice will be quality – so that it delivers the best outcomes for Australians.
An Australian retirement system must be fair
Strengthening the system also means that we need to ensure it reflects society’s expectations around fairness.
In just the past week, the Tax Office revealed that there are 42 self‑managed superannuation funds with assets in excess of $100 million.
No one is decrying that success.
But you’ll have a hard time convincing me that these accounts need their current level of taxpayer support.
The top 10 per cent receive over 40 per cent of the current earnings concessions.
And the cost of superannuation concessions will exceed the cost of the Age Pension by the 2040s.
So we think it is a fairer outcome if we modestly reduce the tax concessions for some of these accounts with very high balances.
We’re not capping how much can be held in superannuation.
And the tax concessions will still be generous for everyone.
But budgets are about trade‑offs.
If you think the current tax concessions are appropriate, then you will need to find those savings by cutting services somewhere else.
Our decisions mean we can go further to improve the equity of the system.
Where we believe more support has been needed is in paid parental leave.
By 2026, we will have expanded the government‑funded scheme to a full 6 months, an extra 6 weeks of paid leave.
And we don’t think this time off work should impact your retirement income.
For births and adoptions from 1 July next year, all parents who receive PPL will be eligible for an additional 12 per cent payment directly into their super fund.
This is a landmark reform for families that could see them up to $3,000 better off.
That’s a fairer outcome.
Conclusion
Our superannuation policy agenda is comprehensive.
But the thread that binds it together is what we have proposed as the objective of superannuation.
That savings would be preserved to deliver income for a dignified retirement – alongside government support – in an equitable and sustainable way.
So we are committed to a system where every dollar of super is paid.
A system that maximises performance.
And a system that puts the member’s needs at the centre.
This is the vision for better retirement incomes for all Australians.
That’s the objective of super.
