2011: A year for ‘decision and delivery’

I attended a Committee for Economic Development of Australia (CEDA) breakfast recently at which Prime Minister Julia Gillard was presenting.

Ms Gillard said 2011 would be a year of ‘decision and delivery’ for the government. Certainly, with the number of reviews and enquiries the government has launched over the last two years, ‘decision and delivery’ will be a welcome approach in the new year, if only to provide clarity around where certain industries are heading, and allowing industry participants to prepare accordingly.

Interestingly, Ms Gillard only noted two action items for superannuation in her speech: increasing super guarantee levels and addressing government contributions for low income earners. Given the super industry is eagerly anticipating the government’s response to the Cooper Review – due out before Christmas – I thought that was a rather minimalist inclusion by the Prime Minister.

With that in mind, I thought I would outline a few items on my own wish-list for ‘decision and delivery’ in superannuation for 2011:

1) Respond to the Cooper Review report decisively – strive to set the right policy settings by applying practical solutions to identified issues. Open and honest consultation will be imperative, and remember: more rules and greater regulation will not necessarily solve the problems.

2) Abolish the extreme penalties from the excess contributions tax – Australians should not be punished for trying to do the right thing and save adequately for their retirement.

3) Raise the concessional contributions caps to a more realistic level that will enable Australians to save more for their retirement.

4) Allow all Australians to top up super guarantee amounts by claiming a tax deduction for personal super contributions (not all employers let their employees salary sacrifice to top up super guarantee contributions). Then, address the anomalies in super guarantee payments that allow an employer to satisfy their obligations with an employee’s own salary sacrifice amounts.

5) Resolve to stop tinkering with super – fix it and then leave it alone! (See my last blog). This alone will do wonders for engagement with super in Australia.

The decisions the government is about to make in superannuation will be momentous for the industry and for Australians striving to save for a comfortable retirement. And they are decisions that will be felt for years to come. The government, charged with the critical task of making the right decisions, is about to create its legacy in policy-making, not just around super, but around tax and financial services too.

It’s a big task, but with open and honest consultation, effective decisions and delivery are within reach.