Superannuation reform package is facing hurdles

Superannuation reforms giving Josh Frydenberg the power to block funds’ investments face an uphill battle within the House of Representatives.

Independent MP Craig Kelly. Picture: Gary Ramage

Superannuation reforms giving Josh Frydenberg the power to block funds’ investments face an uphill battle within the House of Representatives in the first major test of the Morrison government’s numbers since rogue MP Craig Kelly defected from the Liberal Party.

Mr Kelly said he would not support a bill he considered contrary to conservative values and is pushing the Treasurer and Scott Morrison to make significant changes.

If the MP for Hughes cannot be brought onside, then the government would have to turn to independent Andrew Wilkie and Centre Alliance MP Rebekha Sharkie to pass the reforms which are designed to hold underperforming funds to account and limit multiple ­accounts that cost workers in fees.

Greens leader Adam Bandt is opposed to the package in its current form. Fellow crossbenchers Craig Kelly, Bob Katter, Zali Steggall and Helen Haines have expressed opposition to the directions power in the legislation, allowing Treasury to block funds’ investments if they are considered contrary to the national interest.

Mr Kelly said on Tuesday that the bill in its current form gave the government the ability to interfere in private business.

“I remain opposed to the very controversial proposal to give the Treasurer the power to overrule spending and investment decisions by super funds,” he wrote on Twitter.

“This is a gross interference by Government on business decisions of a super fund. Your Super, Your Choice.”

Ms Sharkie and Mr Wilkie have not confirmed a final position and are still working through amendments with the government. The government would require the support of one crossbench MP to pass the bill after it lost its working majority when Mr Kelly resigned and moved to the crossbench in February.

When he defected from the Liberal Party, Mr Kelly said that he would only vote against government legislation if it was not in line with the policies Mr Morrison and the party took to the 2019 federal election.

Superannuation Minister Jane Hume told Sky News on Wednesday she believed the legislation would “definitely pass” and noted the government had not passed a superannuation bill in recent years that had not faced some level of opposition.

“I think people realise that the most important thing that we can do is make sure that your super fund follows you throughout your super life, that it’s much easier to choose between funds, that funds are made accountable for their underperformance and there’s a greater level of transparency and accountability by superannuation fund trustee.”

Senator Hume said the government would continue to negotiate with crossbenchers and “clarify their concerns”.

Labor is calling on the government to withdraw the bill – which is currently before the lower house- and negotiate with the opposition and crossbenchers. The opposition is focused on removing the directions power and ensuring the package does not “staple” people to the first super fund Australians joined as they progressed throughout different jobs.

Opposition assistant treasury spokesman Stephen Jones said the directions provision had “no place in Commonwealth law”.