Outlook conference: superannuation sector shakeup concerns Bowen

Labor treasury spokesman Chris Bowen has laid out concerns about the Productivity Commission’s shake-up superannuation.

Shadow treasurer Chris Bowen MP speaks during a press conference at the Australian's outlook conference at the Grand Hyatt, last night. Picture: Aaron Francis

Opposition Treasury spokesman Chris Bowen has laid out concerns about the Productivity Commission’s recommendation to shake-up the $2.7 trillion superannuation sector in the interests of savers.

Mr Bowen, speaking at the Economic and Social Outlook Conference yesterday, said Labor foresaw “some unintended ­consequences” of the commission’s proposal for a single top 10 “best-in-show” list of the country’s highest performing super funds based on a range of metrics. “That is something we have ­expressed concern about,” Mr Bowen said. “It is a big call to have 10 best-in-show funds. That would have some competitive impacts.”

The union-and-employee-backed industry fund sector has complained about the commission’s recommendation that default super arrangements be broken from the enterprise bargaining system and that the Fair Work Commission’s role as arbiter of the default super allocation be scrapped for an independent panel of experts.

Productivity Commission deputy chairman Karen Chester, who led the department’s landmark review of the super system, told the conference she would be closely watching the last public round of hearings for the financial services royal commission before handing down the final report for the review of the super system.

“This is a once in a lifetime, for me in a public policy sense, to have planets align where you have the bookends of the Productivity Commission’s report on the financial system, the Productivity Commission report on super, looking at the public policy architecture and the evidence base, and all of that feeding into and informing a royal commission,” Ms Chester said.

Mr Bowen said Labor was still committed to increasing the super guarantee to 12 per cent, up from its current rate of 9.5 per cent.

“Nine-and-a-half is not adequate. We need 12 for adequacy,” Mr Bowen said.

“I am interested in the health of the superannuation sector as a whole. Funds that aren’t performing is a matter for them to communicate to potential clients.”

Mr Bowen said the PC’s recommendations, to be made in a final report due by the end of the year, would need to be considered by the government of the day “side-by-side” with the royal commission’s final report.