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Shorten dismisses Productivity Commission on default super already

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Media Release Senator Mathias Cormann Shadow Assistant Treasurer Shadow Minister for Financial Services and Superannuation

12/0822/MC 22 August 2012

Shorten dismisses Productivity Commission on Default Super already

Bill Shorten is trying to bully the Productivity Commission on its views on how best to ensure genuine transparency and competition in the superannuation default fund market by pre-empting its findings and final recommendations due in October with his announcement today.

It is this Labor government which is responsible for the current discredited closed shop and anti-competitive arrangements for the selection of default super funds under modern awards through Fair Work Australia, which inappropriately favours union dominated industry funds.

Labor had to be shamed into fixing this in the lead up to the last election.

All the way back in August 2010 Labor promised to ensure default funds under modern awards would be selected through a more transparent and competitive process if re-elected to government.

Clearly guided by a desire to give his union friends the strongest possible competitive advantage, Bill Shorten waited as long as possible before getting the Productivity Commission review underway.

Now that it’s underway he wants to gazump the process.

The Minister has effectively confirmed he will ignore the recommendations of the Productivity Commission so he can continue to put the interests of his union friends ahead of the public interest.

After ongoing delays the Minister was dragged reluctantly to commissioning the Productivity Commission review. Now his announcement today confirms that the government has no intention of even considering the recommendations, because the government has already made up its mind.

The Minister's media release makes clear for example that the government will preserve the discredited and conflicted place of Fair Work Australia in selecting default funds.

We know that the Productivity Commission's draft report would have scared Minister Shorten's union dominated Industry Super Funds - the main beneficiary of the current system.

The key finding of the draft report was that the "selection and ongoing assessment of those funds should be merit based", which was clear recognition that the current system is not merit based.

The draft report also found that there was no case for using prescriptive criteria for selecting and reassessing default superannuation funds.

Unlike the Government, we will carefully consider the recommendations of the Productivity Commission and deliver genuine competition into the default fund market.

MEDIA CONTACT: Senator Cormann 0411 874 546