Second Reading SpeechMr Shorten (Minister for Financial Services and Superannuation and Minister for Employment and Workplace Relations)
That this bill be now read a second time.
This bill introduces a framework to support the implementation of superannuation data and payment standards that will apply to specified superannuation transactions undertaken by superannuation entities and employers.
These amendments are part of the SuperStream package of measures designed to enhance the back office of superannuation. The superannuation industry is currently dominated by paper based transactions that are inefficient in both processing costs and the time taken for transactions to occur and superannuation to be deposited into member accounts.
Members of superannuation funds and employers will both benefit from the changes. For example, fund members will benefit from being able to easily manage their superannuation accounts, have low-value inactive accounts consolidated automatically and easily check if their superannuation contributions have been paid.
Employers will benefit from having standardised simplified administrative processes when dealing with superannuation funds. Conversely, superannuation funds will benefit from standardised simplified administrative processes when dealing with employers and other funds.
It is estimated that the SuperStream proposals could save the industry and, therefore, members of superannuation funds up to $1 billion per year. Much of the benefit of these savings should flow through to members in the form of lower fees and charges.
The standards will be mandated for superannuation entities (including approved deposit funds), retirement savings account providers and for employers.
A new penalty framework is also introduced to ensure trustees of superannuation entities, RSA providers and employers comply with these standards.
This bill also enables the Commonwealth to collect the costs associated with the implementation of the SuperStream measures and enables the minister to make a determination that specifies the proportion of levy money paid to the Australian Prudential Regulation Authority (APRA) that is to be credited to the APRA Special Account.
The cost of implementing the SuperStream reforms is $467 million in total, over seven years, to be paid for by a temporary SuperStream levy on APRA regulated funds. If you average the full levy increase of $121 million to apply in 2012-13 across the approximately 33 million accounts existing today, the cost is roughly a modest $4 per account per year.
Estimates undertaken by the superannuation industry have identified that SuperStream will save in the order of $1 billion each year in processing costs. Averaged over the approximately 33 million accounts existing today, this saving is in the order of $30 per account each year.
This is a significant saving for each and every member of a superannuation fund.
The coalition have acknowledged that the SuperStream measures have the potential to deliver real savings that will benefit superannuants and for once they support changes that make the superannuation system more efficient, transparent and competitive.
Full details of the measures in this bill are contained in the explanatory memorandum.