Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Statement on superannuation policy

Download PDFDownload PDF


40 ;41 41


AUS -411'1"1




EMBARGO until delivery in Parliament


Today, I have announced in Parliament some important measures designed to strengthen the Government's established superannuation policies, including:

a comprehensive package of measures to protect small superannuation accounts from erosion by administrative fees and charges;

confirmation of the basic framework of the Government's superannuation policies in response to suggestions from Dr FitzGerald's Report on National Saving; and

a number of other measures which will improve the operation of the Superannuation Guarantee system and its interaction with superannuation provided under industrial awards.

Superannuation is the Government's preferred means of ensuring that Australians can enjoy a higher standard of retirement living in addition to that obtained from the age pension and related benefits.

Superannuation is also creating an increasing pool of national savings.

The Superannuation Guarantee introduced in 1992 ensures that the vast majority of employees obtain superannuation support from their employers as part of their overall remuneration.

The small amounts package announced today will ensure that the substantial benefits of superannuation are provided to all employees receiving contributions, including those who have just begun to accumulate their superannuation savings or who have casual or part time employment.

Unfortunately, many such employees have found that administrative fees and charges have taken more from their superannuation savings than was gained through investment earnings. Today, I have announced an end to this problem.

The central element of the Government's package is to require superannuation fund trustees either to

redesign their charges to protect small accounts from fees which are greater than earnings; or

to redirect small superannuation contributions towards a new "safety net" alternative payments mechanism to be established by the Taxation Office.

These measures will ensure that the problems are addressed comprehensively, both for existing and new small superannuation accounts. I COMMONWEALTH PARLIAMENTARY LIBRARY



In addition the Government will take a number of supplementary measures to reduce the incidence and costs of small accounts, including streamlining regulatory requirements, voluntary use of the Tax File Number to help identify and aggregate accounts, a further extension of the annual basis of assessment of the Superannuation Guarantee, and encouragement of industry initiatives such as a voluntary transfer protocol.

To assist in restructuring of the superannuation industry a limited concession will be introduced to enable a rollover of capital gains tax for funds which merge over the next three years.

Following consideration of the FitzGerald report, the Government has decided to confirm the basic framework of its superannuation policies. In particular there will be no changes to the taxation of superannuation fund income or contributions.

Existing arrangements for the delivery of superannuation products will be retained, with no special rules introduced for superannuation savings accounts which could advantage banks over other providers. A number of banks already offer superannuation savings accounts through their life office

subsidiaries or associates.

Other measures announced in the statement include:

clarification that the Superannuation Guarantee legislation is not to affect the continuing role of industrial tribunals in the superannuation area;

easing compliance with the rules relating to the earnings bases used to meet superannuation guarantee obligations: and

introduction of exemptions from the superannuation guarantee for genuine prizemonies (eg won by sportspersons) and for allowances paid to local government councillors.

Taken together, the measures announced today demonstrate again the Government's commitment to superannuation and its twin roles of achieving better retirement incomes and higher national savings. Employees can have even greater confidence that superannuation will contribute to higher retirement living standards.

Details for all of the measures are provided in the Statement and the Attachments.

CANBERRA 28 June 1994