Media Release

A firm commitment to super reform but don't forget tax

The Institute of Chartered Accountants in Australia (the Institute) said today the federal government’s response to the most comprehensive review of Australia’s superannuation system in 20 years would go a long way to boosting and protecting the retirement savings of working Australians.

“Over the last 20 years, changes to the super system have unsettled fund members and eroded confidence in our super system. What we have today is a firm commitment to superannuation reform in the best interests of Australians saving for their retirement,” said the Institute’s Head of Superannuation, Liz Westover.

“The government’s recognition that there is ‘too much tinkering in superannuation,’ together with its blueprint of reforms, is a big step towards addressing the lack of engagement with superannuation in this country,” she said.

Ms Westover said Australians could look forward to reforms designed to reduce fees, address lost super, provide a simple, cost-effective default fund product, and deliver access to meaningful and comparable information on their super accounts.

But Ms Westover warned that much of the ‘tinkering’ in recent years has been around tax issues and that there was a wider ambit for reform that the federal government had not yet bedded down.

“While today's super reforms are a good start, these tax issues are far from resolved. The government’s 2011 tax forum should set the agenda for the final stage of these reforms,” Ms Westover said.

The Institute is encouraged by the government’s commitment to consult with industry experts on the technical detail of the changes.

“This collaborative process will turn big ideas into workable, practical solutions by ensuring the reforms meet original policy objectives when they are put into action,” Ms Westover said.

Raising the bar for SMSF auditors

Under the government’s super reforms, all approved Self-Managed Super Fund (SMSF) auditors will be required to adhere to minimum competency requirements and meet independence standards as part of an ongoing registration with the Australian Securities and Investments Commission (ASIC).

Ms Westover said the super system would benefit from a register of SMSF auditors, and welcomed the move to apply independence standards across the board.

More than 95% of Australia’s 11,500 SMSF auditors are members of the three professional accounting bodies and are bound by minimum competency requirements and specific professional and ethical standards – including around independence – set by the Accounting Professional & Ethical Standards Board.

“The Institute has long been calling for the existing standards to apply to 100% of SMSF auditors, so we are very pleased the government has not only acknowledged the high benchmark we have set, but also recognises the need for its wholesale adoption. We look forward to working with the government and ASIC to make it happen,” Ms Westover said.

Article last Updated 5 July 2011