Tax wrangle perceived threat to increased super
Newcastle Herald
Thursday March 31, 2011
KEY super industry players have called on the government not to let the latest wrangling over its mining tax package derail plans to increase compulsory super contributions to 12per cent.Delegates at the Conference of Major Superannuation Funds on the Gold Coast responded with dismay to news the Greens opposed the planned cut to the company tax rate which would, in some part, compensate for the requirement to make higher super contributions."If the company tax cut is taken off the table it will be really hard to get business to take up 12per cent super," said the chief executive of the Australian Institute of Superannuation Trustees, Fiona Reynolds. "It brings the focus back to the mining tax and company tax rather than the good that could be done by increasing super."The institute has launched a public campaign to garner support for higher contributions.Assistant Treasurer Bill Shorten told the industry it should not assume 12per cent super would pass through Parliament without outside support.But Industry Fund Services chief executive David Whiteley said with many business groups already opposed to the increase, the Greens' stance was likely to make little difference to the chances of getting the legislation passed.Funds were also told to get behind big picture reforms such as the introduction of low-cost MySuper accounts rather than dwelling on details and misconceptions.Stronger Super Peak Consultative Group chairman Paul Costello said MySuper would give funds an opportunity to get away from the "value destroying" practices of measuring themselves against their peers and focusing on the short term and refocus on benefits for members.He said there was still confusion about MySuper but funds should not fall into the trap of developing the lowest cost product possible and stripping away some of the features they now offer."The government's real focus is not on cost reduction but delivering value to members," he said.Mr Costello said the government was also keen on a code of governance for super funds but there were questions as to whether it should be compulsory.He said while several codes existed, a universal code was preferable. The government had not said what it wanted in a code, but was clear it wanted to achieve best practice.The Australian Institute of Superannuation Trustees and Industry Funds Forum launched a governance framework for not-for-profit funds at the conference. It includes recommendations to disclose remuneration policies and directors' fees. SMH
© 2011 Newcastle Herald
