The superannuation system must be the best it can possibly be to ensure that every Australian is confident in controlling their own destiny.
That was the overarching theme of Minister for Revenue and Financial Services Kelly O'Dwyer's address to the 2017 SMSF Association National Conference this morning, reaffirming to delegates the government's position on incoming superannuation and financial advice legislative reforms.
"There are, after all, such few industries that have such far reaching effects on people's later lives and it does mean the system must be the best it can possibly be, whether it's through changes to provide people with more choice or better professional standards. The government is committed, like you, to making it happen," O'Dwyer told delegates.
The minister acknowledged that not everyone is satisfied with the superannuation tax reform package, saying that despite this the legislation will improve the sustainability, flexibility and integrity of the super system overall.
"As our population ages and our fiscal pressures increase, it is important that superannuation tax concessions are affordable and well targeted. It is important that all Australians are encouraged to save for their own retirement," O'Dwyer said.
"Not everyone is happy with all aspects of this legislation, especially those with funds that are very, very significant. But even under the new rules, the earnings on their funds will still receive a very generous tax concession and the capital will remain untaxed," O'Dwyer explained.
While highlighting the rapid and ongoing growth of the SMSF sector, O'Dwyer acknowledged the majority of Australians choose to outsource the management of their retirement savings to APRA-regulated funds.
"This is a choice that the government fundamentally respects which is why it is absolutely critical that our superannuation industry as a whole has well-governed standards of oversight, probity and accountability at its foundation...that will give members an understanding that their superannuation is secure," O'Dwyer said.
Further, O'Dwyer described the new professional standards legislation as the government's means of ensuring that future retirees have access to the highest quality financial advice possible and fostering trust and confidence in the industry.
"Access to appropriate financial advice can significantly improve people's long-term financial wellbeing, however reduced trust acts as a barrier to consumers seeking financial advice. That is why we has committed to raising the education, professional and ethical standards of financial advisers," O'Dwyer said.
Aspects of the minister's address - particularly comments around the new reforms being supportive of the key objective of superannuation - were challenged in an earlier panel session when SMSF Association head of policy Jordan George said there is still some way to go in defining the objective of superannuation.
"The area that we think is currently lacking is that there is no reference to either adequacy, or what we would like to call the idea of secure and dignified retirement, which gives some level of comfort to people that they can save to be self-sufficient or maintain a comfortable standard of living," George said.
George reminded parliament that it's their job to make judgement about the system.
"If the idea that adequacy is too hard to define and means a lot of different things to different people - that's why we elect politicians, to make those decisions. So, I think the idea that just because there's no single agreement as to what adequacy means shouldn't mean we shouldn't have some concept of it in the objectives of super," George said.