The federal government faces an uphill battle to pass controversial investment measures contained in its Your Future, Your Super legislation, with independent crossbench MPs indicating that they will vote against the proposals.
The most controversial section of the changes relates to the provisions that would allow the treasurer to veto any investment by a super fund if it is deemed contrary to the national interest.
The changes would also allow the treasurer to cancel any expenditure that was not deemed to be in the best financial interests of members.
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Independent crossbench MPs Bob Katter and former Liberal Craig Kelly have said they would vote against the legislation, which means the Coalition has just 75 votes in the 151-seat House of Representatives.
Superannuation minister Jane Hume told Radio National that the changes were important and the government would not amend its legislation even though the most controversial measures would only be used as a “last resort”.
“It is not a measure that allows a minister to wake up one morning with an agenda and strike out specific investments, it clarifies their duties of best financial interest,” Ms Hume said.
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“We know there are grey areas occasionally where expenditure doesn’t reflect a good use of members’ money.
“That’s why we’re introducing the regulation power, recommended by APRA, to clarify some grey areas that are hard to enforce.”
Mr Kelly told The Australian Financial Review that the measures contained in the bill were “contrary to Liberal Party values”.
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Mr Katter told The New Daily he absolutely agreed with the comments made by Mr Kelly and was surprised that Treasurer Josh Frydenberg was proposing the superannuation changes.
“Josh is one of the greatest pro-free market men in the Parliament … and so it’s very ironic that he’s putting in the complete antithesis [to this],” Mr Katter said.
The controversial Queensland MP was also concerned about measures in the legislation that would ‘staple’ Australians to the same super fund as they changed jobs.
Mr Katter said the move was well intentioned, but could leave many Australians languishing in underperforming funds.
Independent members Zali Stegall and Helen Haines also told The New Daily that they were concerned about the directions power included in the legislation.
“I am strongly against the inclusion of the directions power in Your Future, Your Super Bill as it introduces uncertainty and inappropriate intervention in the market,” Ms Stegall said.
Members of the superannuation industry told a Senate committee in April that the changes would lead to higher costs for members as funds would have to carry out additional compliance “without any corresponding benefit”.
Australian Institute of Superannuation Trustees (AIST) chief executive Eva Scheerlinck warned that, in addition to the Your Future, Your Super legislation being overly reliant on regulations, the draft regulations were silent on crucial issues affecting the retirement outcomes of millions of Australians.
“This leaves significant areas of uncertainty that make member outcomes unclear and implementation highly problematic,” Ms Scheerlinck said.
“In particular, there are no draft regulations at all to provide clarity and guidance around the entire of the Best Financial Interests Duty Schedule, which introduces an extreme ministerial power to ban investments and extensive new duties and penalties for trustees.”
Do you support the proposed changes to superannuation legislation giving the treasurer the power to veto some investments? Does this policy run counter to the free market ideals of the Liberal Party?
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