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(Australian Associated Press)
Prime Minister Scott Morrison has stressed that offering all Australians a low-fee, government-run superannuation fund as a default option is not government policy.
His comment comes after Jobs Minister Kelly O’Dwyer told The Australian Financial Review she would support every Australian being offered such an option, managed by the government’s $150 billion Future Fund.
“I’m aware of that proposal. It’s not government policy,” Mr Morrison told reporters in Vanuatu on Wednesday.
Ms O’Dwyer’s suggestion – which she has advocated previously – follows the release last week of a long-awaited report into the nation’s superannuation system by the government’s independent economic advisor.
The Productivity Commission found Australians could retire with an extra $500,000 if changes are made to the sector, including ensuring people are only given a default superannuation fund once.
Beyond that, employees should be given a list of the 10 best super funds to choose from when they start a new job selected by an independent expert panel, the commission said.
Ms O’Dwyer says offering a default option run by the Future Fund – which already manages pensions for retired public servants – makes sense in a compulsory system.
“Why is it that only public servants can access the fund management expertise of the $150 billion Future Fund? Why shouldn’t every Australian have the same opportunity that’s provided to public servants?” she told the AFR in a story published on Wednesday.
She said the Productivity Commision report and the banking royal commission, have made it “crystal clear” the superannuation system isn’t working as well as it should for members.
“The current system is great for the funds themselves and for the many rent seekers and ticket clippers in the superannuation sector.”
The government has said it will respond to the commission’s report after the banking royal commission, which looked at the conduct of super funds and how they’re regulated, makes its findings in February.
Mr Morrison said they will “carefully consider” the Productivity Commission recommendations.
“What it’s highlighted is the real weakness that is there in the system,” he said.
Opposition Leader Bill Shorten said a Labor government would focus on giving the worst-performing funds their marching orders.
“We have got to look at the bottom quartile – the bottom quarter of underperforming funds,” he told Nine’s Today Show on Wednesday.