In a statement on Thursday (16 November), the Minister for Financial Services Stephen Jones confirmed that the government has officially introduced to Parliament the Superannuation (Objective) Bill 2023, which defines the objective of super as “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
“An agreed objective of super will serve as a guide for future governments, regulators, industry, and the wider community, instilling greater confidence in the system,” the minister said.
“The last decade saw the former government raid the superannuation system for its own purposes with a devastating impact on the savings of millions of Australians. Legislating an objective of super will help prevent this happening again.”
According to Mr Jones, the objective will also help ensure super delivers on its foundational promise of providing a dignified retirement for more Australians.
“In the future, any proposed changes to super legislation will be judged against the objective. This will make policymakers more accountable when considering changes that affect Australians’ retirement savings,” the minister stated.
He stressed that the objective “will not alter superannuation trustees’ existing obligations or provisions around the early access to super on compassionate grounds”.
“Superannuation is a significant source of capital, contributes to the strength of our financial markets, and there are opportunities to leverage superannuation investment in areas of national economic priority where it aligns with the best financial interests of members,” he noted.
“Having a clear, legislated objective of super will help ensure these broader benefits can be maximised.”
The introduction of the bill to Parliament was made by Treasurer Jim Chalmers who in his speech said: “Australia has a world-class superannuation system that is the envy of countries right across the globe. But for the last 10 years or so super policy has been costly, confused and chaotic.”
“Those opposite raided the superannuation system for their own purposes with a devastating impact on the retirement savings of millions of Australians,” the Treasurer continued.
“Legislating an objective of super will help prevent this sort of short-sightedness ever happening again, making sure the focus of super is on the best interests of members, and not on those interested in ideological battles,” he added.
The Treasurer also emphasised that with more Australians approaching retirement age than at any time in the country’s history, “delivering better retirement incomes has never been more important”.
“This bill is an important next step towards a stronger super system for a stronger economy and it has been met with strong industry support, and I want to thank the industry for their engagement.”
Terms explained
The bill’s accompanying material delves into the nuanced definitions of key terms such as “preserve savings”, “deliver income”, “dignified”, “equitable”, and “sustainable”.
For example, what is meant by “dignified”, in the context of the objective of superannuation, is “a standard of financial security and wellbeing in retirement which allows the person to participate economically and socially in their community”.
“‘Dignified’ does not mean the same level of income in retirement for all Australians, and many Australians will rely on a combination of superannuation savings, government support and private savings to achieve a dignified retirement,” it stated.
Regarding the use of the word “equitable”, the government explained that its inclusion underscores the recognition that “superannuation policy can exert a distributive influence on Australian society”.
“While equity is a subjective concept, in this context, it captures the importance of a system that delivers similar outcomes to people in similar situations and targets support in the superannuation system to those most in need.”
Maja Garaca Djurdjevic
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.
