Ladies and Gentlemen, I am very pleased to be here with you today.
What we - that is the Government and the Tax Office, hope to achieve from this conference is to:
- consider the communications programs that will be needed to implement the choice of superannuation fund and opt out measures;
- learn what the superannuation industry, employers and other interested parties expect in relation to educating the community about these reforms; and
- identify opportunities for possible for joint or cooperative activities.
Our common aim is to ensure that the community gets the maximum benefits from the opportunities that choice offers. This means that:
- employers are well aware of their obligations; and
- employees are well-informed about their choices.
As you all know, the Government is strongly committed to superannuation as a cornerstone of Australia's retirement income system and as a key means of lifting national saving.
In this context, the Government sees choice of fund as a major reform and improvement to the current system.
Choice is good for the individual, it's good for the superannuation sector and it's good for the community and nation as a whole.
The opt-out policy is also an important reform and one which recognises the particular lifestyle needs of low income employees (ie, those earning between $450 to $900 per month).
These are all part of the Government's integrated approach to retirement income policy, including the Savings Rebate, the Superannuation spouse rebate, the increased limit for superannuation to age 70. These measures recognise that while superannuation is an excellent vehicle for retirement savings, individuals in different stages of their lives have different needs.
These initiatives herald a new climate in which individuals will be empowered to take control of their savings future. An individual is no longer arbitrarily dropped into one or more superannuation funds by the industrial relations system. Rather, the individual can choose the best superannuation product to meet their individual and lifestyle needs. As these needs change according to the progression of their work and family life, people can make changes to achieve the best outcome for today as well as for the future.
As many of you will know, the Government consulted widely on the choice of fund measure and the Government announced changes in November to the policy which reflected those consultations. Legislation has now been introduced into the Parliament.
But the Government also knows that education will play a critical part in getting the choice arrangements to work well. This is also the view of the many people I have talked to about the choice arrangements.
As I have said, there are two clear education goals. One is to inform people, particularly employers, of their obligations under the choice arrangements. The second is to give employees the necessary information to allow them to make informed choices.
The Government is going to play its part in the education task.
We accept that Government has a role in the education process and must advise people of their basic responsibilities. The Government sees its responsibility as being to provide a foundation of core messages on which other players can build. The Government also has a special responsibility to ensure that everyone has access to basic messages. So we always pay close attention to special groups in the community like people of non-English speaking background and aboriginal people and Torres Strait Islanders.
Apart from advising people of their basic obligations, more generally we believe that there is also a need to encourage people to engage themselves in the whole business of providing for their futures by learning about their options and preparing themselves to make plans and decisions. We need to encourage people to take an interest.
The Government believes that the private sector can and should play a substantial role.
This includes the superannuation industry, the banks, employers and financial intermediaries.
The total superannuation assets held in this country exceed $317 billion - a growth of 20% during 1997.
With these impressive figures, I note that choice opens up a huge and growing market and I'm sure industry participants are busy gearing up their marketing efforts.
Obviously, the Government will be looking to the superannuation industry to play a major role in the education role - after all, they will continue to be entrusted to invest the retirement nest eggs of millions of Australians.
The superannuation industry and the banks can do a lot of good by taking a responsible approach to promoting their products in the market place. If they act responsibly, they can use their own promotional material to sell their products but also to get important savings messages out and about.
Government can assist in this process by working with them to provide useful information that can be included in their material.
Employers also have an important facilitation role. Funds will need to make the choice arrangements as simple and costless for employers as possible.
Another important group which must not be ignored is intermediaries - accountants, tax agents and financial planners. This group has valuable opportunities to advise people on how to make wise and effective choices but can assist greatly in the education process. So we are keen to take advice from this group on how we can work together and support this process.
There are clearly advantages in working together cooperatively so we help each other to deliver messages efficiently. It's certainly not cost effective nor practical for Government to shoulder responsibility for communication alone.
I think therefore there are clear advantages in the Tax Office and the various other players working co-operatively to deliver messages efficiently and effectively.
We need the message to be clear, accurate, informative and consistent.
I hope over the next two days that we can develop our thinking together on these main issues.
Thank you and I wish you well for the remainder of the conference.