An Australian worker, currently aged 30, can expect up to $40,000 more in retirement following the reforms to superannuation recommended in the Gillard Labor Government's 'Stronger Super' package, released today by Assistant Treasurer Bill Shorten.
"The Gillard Labor Government is today honouring its election commitment to provide a comprehensive response to the recommendations of the Super System (Cooper) Review," Mr Shorten said.
"Stronger Super represents the Government's reform agenda for the superannuation industry. By setting out a clear path for future reform, the Government is providing certainty to both the industry and fund members."
"By 2050 there will be 27 working aged people for every 10 people aged 65 and over, compared to 50 for every 10 today. With superannuation becoming a significant source of income for retirees, it is vital we get the changes to the system right."
"As at September 2010, around $1.3 trillion was invested in superannuation in over 430,000 entities. That figure is roughly equivalent to our GDP, and represents a nearly seven-fold increase since 1993. The figure is estimated to increase to $6.2 trillion by 2036, with $550 billion directly from the Government's superannuation reforms, including the increase to the superannuation guarantee to 12 per cent."
The Stronger Super package includes the introduction of a new low cost and simple default superannuation product called 'MySuper', heightened duties for superannuation trustees, and support for the Super System Review's SuperStream proposals.
The superannuation industry processes an estimated 100 million transactions a year at a total cost of $3.5 billion. So the average cost of each transaction is around $35. Contributing to this inefficiency, each working Australian has, on average, three superannuation accounts.
"The Government is acting to reduce the unnecessary fees and charges on working Australians' retirement savings, and to remove barriers to a low cost and efficient superannuation system," Mr Shorten said.
"We estimate that, in the long run, these reforms will save members $2.7 billion a year in fees."
Stronger Super will improve the operation of the superannuation system and, together with the Government's commitment to increase the superannuation guarantee to 12 per cent, will deliver a comfortable and secure retirement for current and future generations of Australians.
"Superannuation is one of the most important pillars of Australia's financial system. It is one of the reasons Australia came through the GFC so well and it is a pool of national savings that place this country in an excellent position for future development."
"Now is the time to build a community and Parliamentary bipartisanship for delivering stronger superannuation. Just as in life generally, nothing is more important in public policy than building a better, more secure future for our children and grandchildren. These reforms will reap real dividends for future generations," he said.
The Government will undertake further consultation with stakeholders on the implementation of its reforms. Further information is available from the Stronger Super website at strongersuper.treasury.gov.au
16 December 2010