In a rare direct address to Australia’s financial services sector, the Prime Minister, Julia Gillard, spoke to industry stakeholders today at a function in Sydney.
Speaking at a special session of the Financial Services Council’s political series, the Prime Minister’s remarks to the packed audience focussed on Australia’s superannuation industry and the vital role it plays in the economy.
Referring to the development of ‘universal’ superannuation in Australia over the last twenty years, Ms Gillard called its development a ‘democratisation of wealth’ that provides a national nest egg larger than Australia’s annual GDP or the entire market capitalisation of the Australian Securities Exchange.
Ms Gillard emphasised the importance of superannuation savings and the role it plays in the country’s economic stability and also reflected on its future role and growth prospects.
In looking forward, Ms Gillard linked the future growth of people’s superannuation accounts, into which her Government intends making “… massive injections…”, with the Minerals Resource Rent Tax (MRRT).
According to Ms Gillard, the long term aim is for all Australians to achieve adequate retirement savings. This cannot be achieved without substantial increases to superannuation contributions. In seeking to increase universal superannuation contributions from 9% to 12% Ms Gillard says this will not be achieved without the MRRT.
Commenting on the link between increased superannuation savings and the MRRT, one industry exec reminded riskinfo that when the 3% Superannuation Guarantee was first introduced in the early 1990’s it was done so in consultation with the union movement and industry bodies by way of foregone salary increases. The 3% employer superannuation contributions effectively recognised productivity gains that had been achieved by Australian industry and were not dependent on raising new taxes or levies.
On the topic of superannuation reform within the Government’s Future of Financial Advice reform proposals, Ms Gillard emphasised the need to strip away inefficiencies in the system to ensure as much money as possible flows into the hands of retirees.
Ms Gillard strongly advocated the Government’s SuperStream productivity agenda and the introduction of the ‘simple, low cost, no frills’ MySuper products and the role the industry has in delivering these solutions to superannuation fund members.
Ms Gillard told the audience she is optimistic about Australia and Australians, believing our best days are ahead of us.
