ABA WELCOMES THE KICK START TO SUPERANNUATION REFORM ABA calls on all political parties to rally behind essential and core public policy principles in regard to the superannuation system Sydney, 25 May, 2003: The Australian Bankers’ Association (ABA) welcomes the Federal Government’s reinvigoration of superannuation reform and the commitment to give Australian workers the ability to consolidate superannuation accounts and decide who manages their own money.   Choice of Fund: Default Fund   The Government’s decision to introduce an amendment to the Default fund provisions  improves the legislation by simplifying the process, lowering business costs, yet  still empowers workers to decide who manages their own money. This is an important amendment by the Government.   One of the key benefits to workers’ and the economy generally of greater choice, will be much greater competition between providers of super funds. This will lead to the downward pressure on fees, providing better value for consumers.   Portability: Consultation Phase   The Government’s announced consultation timetable on portability legislation is a welcome initiative. Portability, in conjunction with choice of fund, will allow workers to consolidate their superannuation accounts and therefore simplify their super portfolio and lower fees and charges.   Taken together, choice and portability stand as a significant microeconomic reform of the superannuation system. Like nearly all other financial services, consumers will be empowered to drive their own retirement income plans.   Of course, an important element of greater choice is better education. ABA supports the Government’s commitment to providing funds for more education.   Co-contribution   ABA believes the superannuation system should be based on sound public policy principles. The co-contribution policy addresses an equity principle that the ABA endorses.   Super Surcharge   ABA joins with most other policy advocates in wanting to see reduced and more appropriate taxation of superannuation, particularly by a greater skewing of the tax incidence towards the benefits stage, rather than the contribution and accumulation stages.   In this respect, we support a lower super surcharge. It will entail tax expenditures in the short-term, but will have long-term benefits.   Superannuation splitting   ABA will consult with the Federal Government on its foreshadowed commitment for superannuation splitting. There is a need here to ensure that simplicity and business costs are considered in the policy.   Bi-partisanship on Superannuation Policy   ABA would like to see a far greater degree of bi-partisanship on superannuation emerge. This is important because the integrity of superannuation long-term will be determined by the need for tough decisions in the short-term.   ABA welcomes recent announcements by the ALP to reduce the tax on superannuation. We also applaud the generally constructive bi-partisan contribution made towards super policy in the Senate Select Committee on Superannuation.   ABA calls on all political parties to rally behind essential and core public policy principles in regard to Australia’s superannuation system.   For further information:   Heather Wellard ABA PR Phone: 02 8298 0411 Mobile: 0409 830 439   ENDS