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Busy week advocating super measures to NCCC and other key policy makers
AIST and representatives from several our member funds have this week met with the National COVID Co-ordination Commission (NCCC) to discuss ways that super funds can work with governments to help drive Australia’s economic recovery from the pandemic.
In a meeting with NCCC chair Nev Power, AIST and the funds discussed ways to increase super investment in affordable housing and energy, with a focus on projects that can create jobs and get underway as soon as possible.
As outlined in a news story and an op ed piece in The Australian today and against the background of fresh calls to allow first homebuyers to tap into their super, AIST is keen to promote a greater understanding of the role that super fund investment could play in improving housing affordability. Our key message is that Australians shouldn’t have to choose between financial security in retirement and a roof over their heads.
AIST also continues to counter claims that increasing the Super Guarantee to 12% will harm the economy and prevent low income earners from receiving a pay rise. Earlier this week in an Age/SMH article we noted that the first scheduled rise to 10% would cost median income earners about $5 a week, while we argued in the Investor Daily that there was no evidence to support claims that there is an automatic trade-off between wages and SG rises.
Elsewhere, AIST had a busy week meeting with several MPs and shadow ministers, including the Assistant Minister for Superannuation Jane Hume, where among other matters, we raised concerns about a delay in the Government’s promised bill to make the splitting of super assets in family law disputes easier and more transparent.
As noted in our recent media release, the Government’s failure to implement the scheme has meant disadvantaged women going through separation – especially those experiencing increased family violence during the pandemic – continue to miss out.
And a bit of humour never goes astray to help get the message across…
Choice of fund returns to Parliament along with ‘more flexible’ super bill
Parliament has confirmed that the Your Super, Your Choice Bill is returning to the Senate on 24 August.
Introduced in the House of Representatives on 27 November 2019, the Bill has been in the Senate since it was introduced on 12 February 2020.
AIST appeared before the Senate Standing Committee on Economics to argue that the Bill should only be supported with substantial amendments that would ensure no member would be worse off.
The Bill will amend the Superannuation Guarantee (Administration) Act 1992 to prevent Enterprise Bargaining Agreements nominating only one superannuation fund in a workplace.
AIST is concerned that the current drafting of Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 has the potential to prejudice interests of some super fund members as it puts at risk the additional superannuation benefits, such as higher super contribution rates than SG enjoyed by many employees covered by EBAs.
In other Parliamentary news, the Treasury Laws Amendment (More Flexible Superannuation) is set to return briefly to the House of Representatives on 25 August before being introduced into the Senate, most likely on 26 August. The Bill implements the final element of superannuation measures announced in the 2019-2020 budget - improving flexibility for older Australians.
The measure will increase the age limit for accessing the bring forward non-concessional contributions cap, enabling individuals aged 65 and 66 to make up to three years of non-concessional contributions. The measure was due to commence 1 July this year.
AIST supports the changes as they give members more opportunity to boost super savings and consequently to achieve better financial security in retirement. Whilst supportive of the changes AIST has advocated for the removal of the ‘work test’ entirely.
Meanwhile, the ATO has updated its website with information on the other ‘flexible’ contributions measures which have passed through Parliament and came into effect 1 July, 2020.
The Superannuation – improving flexibility for older Australians measure changes age limits on super contributions allowing members to:
Members must still meet all other eligibility criteria.
APRA confirms no delay to data transformation consultation
AIST wrote to APRA last week seeking a delay to the regulator’s commencement of its consultation on the data transformation project to reflect the challenges faced by funds in the current environment. In a meeting this week with AIST, the regulator confirmed they will not delay the process.
While APRA has decided to push ahead with industry consultations it will adopt a more flexible approach which will include putting in place checkpoints to track how the process is progressing.
It is expected that four discussion papers on the data transformation project will be released next week.
Cybersecurity risks ‘surging’ during COVID
An industry report exploring the key cybersecurity risks to have emerged during the COVID-pandemic has found that cyber-attacks are surging.
The report says the rapid speed with which organisations moved to digital and online operations has created new loopholes for criminal organisations to attack.
The report captures the discussions of a recent industry roundtable held by Deloitte and the Gateway Network Governance Body (GNGB), where it was suggested that current strategies for addressing cyber risks “are not fit for purpose for today’s environment”.
The report says staff education on cyber-attacks is vital for combating cyber risks, as well as regular patching and updating of IT infrastructure and the use of breach detection software.
ATO taking hardline on unpaid super after the amnesty ends
The ATO has warned it will take a ‘strict approach to penalties’ for employers that fail to voluntarily report instances of unpaid super, once the amnesty for unpaid super ends on 8 September.
In a draft practice statement, the ATO has confirmed its restriction on remitting the Part 7 penalty for employers reporting on unpaid super.
Additional amnesty aspects included not having a Part 7 penalty applied, not being required to pay the $20 per employee per quarter administration component, and being able to claim a tax deduction for the SGC amounts paid by 7 September.
Outlining its approach to non-compliance with employer obligations, the ATO says:
“We have pay-event reporting of SG accruals, and event-based reporting of contribution payments from funds regulated by the Australian Prudential Regulation Authority.”
“Where an employer does not come forward voluntarily for late or non-payment of SG contributions by the due date, we will engage with employers to get their obligations up to date.”
Govt policies not delivering for women: McKell
Government policy responses during the COVID pandemic are compounding the negative economic impacts affecting women, according to a report released this week by the McKell Institute.
In the report, McKell argues that early access to super, education reforms, and lack of adequate access to JobKeeper stimulus for casual workers are disproportionately effecting women.
The report says that the Morrison Government has let early access to superannuation do more heavy lifting to support consumer spending and economic stimulus than the traditional stabilisers in the economy, such as unemployment benefits.
Analysis of HESTA member data shows that younger women are bearing the brunt of multiple economic issues.
Members aged between 18-24 of the healthcare industry fund who accessed their super under the scheme have virtually drained their accounts through reliance on the early release scheme, leaving a median account balance of just $1049, a median decrease of around 78%.
AIST’s weekly update on the status of legislation
The current status of superannuation Bills currently before Parliament can be found here.