The Rudd Labor Government will make no major changes to superannuation tax policy for five-year periods, promoting confidence and stability in the superannuation system.
This will be enshrined in legislation by a re-elected Rudd Labor Government.
This will give Australians the confidence to make investment decisions in the knowledge that the rules will not be subject to constant change.
The five-year freeze, which commences immediately, means Australians can feel confident that under a Labor Government, the rise to 12 per cent super, increased concessional caps and the tax cut for workers earning up to $37,000 will not be ripped away.
Australians are living longer, they need to feel that the superannuation system is fair and sustainable and that superannuation policy is removed from the political cycles for genuine confidence in the system to build.
The Government will also bring forward legislation to establish the Super Council to ensure any future changes to superannuation are consistent with an agreed Charter of Superannuation Adequacy and Sustainability.
The Charter will include the commitment to a five-year moratorium on changes to superannuation tax policy. The establishment of an independent Council will further enhance and protect Australia's superannuation system.
Prior to the conclusion of the five-year moratorium, the Council would conduct a transparent review of the issues that need to be addressed, through the issuing of discussion papers and a thorough consultation process.
Once any proposed changes from this process were made there would be a moratorium on further policy changes for another five-year period.
The Council will have no regulatory powers or function, but it will have the power to initiate its own inquiries into matters connected with the Charter principles.
The Council will be formed initially as an advisory body to further refine the draft Charter and advise on the development of enabling legislation. The Council will be composed of a Chair and up to six other members.
This robust institutional framework will give Australians confidence that there is a predictable and consistent stewardship of superannuation.
The Government will make an announcement on the membership of the Council in due course.
I would like to thank the Charter Group members for their contribution to this important initiative: Jeremy Cooper (Chair), the Alan H Goldberg AO QC, Ross Jones, Elana Rubin, and Steve Tucker.
The final report of the Charter Group, A super charter: fewer changes, better outcomes, can be found by visiting www.treasury.gov.au/supercharter.
31 July 2013