Stephen Jones:
Well today I’m announcing that the Albanese government is taking steps to strengthen our superannuation system by putting in place new service standards. They’ll be mandatory, they’ll be enforceable, and they’ll apply to all APRA‑regulated superannuation funds. This is all about ensuring that our superannuation system is delivering for the people who it’s designed for, and that is the members of the funds. It’s consistent with the work that we’ve been doing around legislating our objectives for superannuation, about the work that we’re doing around financial advice and the work that we’re doing to ensure that we improve the retirement side experience for superannuation fund members.
Now, we’ve got a great superannuation system that’s existed for over 30 years and it’s amassed over $4 trillion worth of retirement savings. It means that the average retiree who is finishing work today has a superannuation balance of around $200,000. That’s an amount of money that was unimaginable to my parents when they retired. All of these things are worth celebrating, but the system is not perfect.
We need to do much more to improve the way that funds are interacting with their members on a daily basis. Now, this would be important work at any time, but when you contemplate this by January 2026, there’ll be one in 5 Australians over the age of 65. That’s over 20 per cent of Australians who are either at or approaching retirement with real superannuation savings to help them have a better and more prosperous retirement. We’ve just got to get better at the way the funds are dealing with their members.
We’ve put the funds on notice. In fact, it was as early as December 2022 not long after I was sworn in as the minister. I’ve been looking at this and made it quite clear that I didn’t think funds were up to scratch. They were given a period of time to lift their service standards. We’ve had the regulators looking at this as well – ASIC has done 3 deep dives on this to look at various aspects of superannuation fund service. And whilst there have been improvements, nowhere near where we need to be.
So the new service standards will start with a focus on the processing of death benefit claims and other insurance benefit claims. It will also look at the communications the funds are having with members. Simple message to funds is we’ve just got to get better. You’ve got to get better at the way that you are dealing with your members. You’ve done a great job of growing their retirement balance, but you haven’t done a great job across the board on ensuring that members are getting the level of superannuation fund service that they deserve. So these new standards will be delivered by regulation. They’ll be enforceable, and they’ll ensure that members get the level of service that they deserve. Happy to take these questions.
Journalist:
Minister, is it worthy of consideration having a separate regulator for superannuation?
Jones:
I don’t think at this point in the process we want to be contemplating setting up a new regulator. I think the important thing for us to do is to ensure that our existing regulators – we’ve got APRA and we’ve got ASIC and we’ve got the financial complaints authority – that they have the teeth and the powers that they need. ASIC already has broad powers to deal with these sorts of matters, but these new service standards will ensure that they can drill down into the particulars and they’ll have more to hang their hat on when it comes to enforcing the level of standard that frankly Australians have come to expect from any financial institution.
Journalist:
Minister, you are set to reach 12 per cent in the superannuation guarantee rate by July 2025. So to confirm, if Labor wins the next election, will there be a pathway to 15 per cent set in the next term, given that is in Labor’s national platform?
Jones:
Look our policy is pretty clear. We want to get to 12 per cent. We were the party that legislated 12 per cent, it was frozen by our predecessors. They then tried to scrap it at 9 and ensure that Australians were stuck on 9.5 per cent. I fought hard, my party fought hard, to ensure that we would deliver on 12 per cent super. We’ve got no plans to move beyond that.
Journalist:
So in June 2022 you said ‘we’re looking at pathways beyond 12 per cent towards the back end of this term’, you’re not doing that? Have you walked away from that?
Jones:
We have no plans to move superannuation beyond 12 per cent. Our objectives around superannuation are to ensure that it continues to deliver great investment returns, and it is, and to ensure that funds are delivering from the service level standards that are required of them and expected of them by their members, but also frankly, to ensure that Australians can have access to the type of information and advice they need to plan a decent retirement. They’re our priorities.
Journalist:
Won’t Labor then be in conflict with the national platform and I know, sorry Minister, I can be a confused about how that works. Sometimes the platform is principles, but can I be clear? The platform says once 12 per cent is reached, there is a pathway 15 per cent. You’re saying there’s no plans, those 2 things seem quite different.
Jones:
We have no plans and as a broad democratic party, of course, we have things within our platform which are aspirational and it’s then up to the parliamentary party to determine the policy that we’ll take to the election and the policies that we’ll implement over every year of a term of the government and we have no current plan for us to be moving beyond 12 per cent.
Journalist:
[indistinct] can you ever see a day where you would go beyond 12 per cent?
Jones:
I’m not going to start looking at hypotheticals, Phil, our objective is to hit 12 per cent. Our objective is to ensure that people can get the information and advice they need to plan their retirement, to ensure that we have the sorts of retirement products available to them so that they can have security in their retirement and to ensure that a fund member has the level of interaction and service that they would expect of any other financials. That’s our plan.
Journalist:
On the division 296 change it’s not looking great over the next couple of weeks in terms of getting it through the Senate, if you do have to take it to the next election as the Treasurer and Finance Minister said you will do, if you don’t pass it, will you have a greater argument on the other side of the election should you win in terms of a mandate to prosecute it given you went to the last election obviously with a promise not to touch super. Do you think you’ll have a stronger argument for that on the other side of the election –
Jones:
– and the way these changes were designed are – they’re designed to ensure they don’t come into effect until after the next election anyway. Let’s take it back a step. What’s this about? It’s about ensuring that we encourage Australians to save for their retirement, but we think what’s a fair level for the Australian taxpayer to be subsidising the retirement savings of Australians. And we think at $3 million, that’s more than fair when you look at the fact that the average Australian is retiring today with $200,000 in their retirement savings. There’s a hell of a lot of head room between $200,000 and $3 million.
Journalist:
Minster, just on the news media bargaining incentive you announced in December. Now that Donald Trump has been inaugurated, has there been any discussions that you’re aware of between your government and the new Trump administration?
Jones:
We reached out in advance of my announcement – the government’s announcement – on the news media bargaining code to ensure that nobody was blindsided by what we were intending to do. And we did as you would expect any government to do to ensure that we were reaching out to the then Biden administration, but also an incoming Trump administration – reached out to both sides and explained what we were doing. Importantly, explaining that this new news media bargaining incentive is about strengthening our existing laws and it’s not designed to raise a single cent. It’s designed to incentivise bargaining under the existing use media bargaining code.
Journalist:
Had the Trump administration expressed any concerns about the policy?
Jones:
I haven’t been involved in any discussions about those issues and as you’d expect with a new incoming government – they’ve got a hell of a lot of things on their plate and, as the Australian Government – we’ve got a lot of issues that we’re raising with the new government as well. They’re questions best directed towards Minister Wong, but what I can assure you of is that in those days leading up to the announcement, we reached out to both sides of American politics.
Journalist:
Minister, how quickly do you want to see the mandatory standards come into place and what do you think is the most urgent part of those standards and is the most important thing.
Jones:
The biggest part of the biggest problem is death benefit processing. So, you know, a husband or wife passes away and they have benefits through their superannuation fund. It’s taking far too long for those claims to be processed. It can be notoriously tricky, but we’ve got to think of this from the member’s point of view. This is going to be be one of the hardest times in their life. They’ve probably got a mortgage payment and they’re wondering how are they are going to make ends meet. That’s exactly what life insurance has designed to deal with and for those claims to be taking months and months and months if not a year to process is just not good enough. So we going to make sure [inaudible]. That’s the biggest part of the problem. It’s not the only part of the problem, so we’ll be looking at other areas. We’ll do this in a way which will enable us to immediately focus on insurance claim processing, But to be able to scale out to other areas as well.
Journalist:
How quickly do you want to see the mandatory standards?
Jones:
There’s nothing stopping the industry moving immediately. Some funds already have. But we want to see right across the board, universal standards across every APRA‑regulated fund. To their credit, some funds have moved, but not everyone has moved and not everyone has moved far enough and fast enough to where the government expects them to be. We want to ensure that 22 per cent of Australians who are in retirement by this time next year have the service and expectations, that we set superannuation up for in the first place.
Journalist:
Labor’s been very critical of the Coalition’s policies that kind of expects people to dig into their superannuation to put down a house deposit and that sort of thing. Would you be looking to enshrine perhaps something that would stop people from doing that while in government considering that you really don’t want that and you want people to save as much as possible as I said before?
Jones:
Can I just say – What’s the policy for super for housing supposed to be about? You know, the entry price for any good policy idea has got to be that it works. But it doesn’t work. It pushes up the price of housing and there’s a very, very small number of Australians for whom, that is a realistic option. It does zero for adding to housing supply, in fact, what it does by pushing up the price of the existing housing stock even further – it makes housing less affordable, not more affordable. So our principal criticism of this idea which has been cycled through to Australian politics for over 30 years and rejected by every sensible government, is that it won’t work. So, can we have a proper sensible debate about housing policies that will work, there’s got to be some supply side, which is what we’re focused on.
Journalist:
But the Coalition also has supply‑side policies such as, you know, all that infrastructure funding that wants to make sure that supply is opened up at the state and local level, that paired with the superannuation…
Jones:
It would actually cut funding for supply. I’ve just got to take you up on that. You got to be interrogating stuff these guys with far more vigour. This bloke is actually cutting the funding for housing infrastructure and supply. So how on earth he can say he adds more fuel to demand but reduces the funding for house building and infrastructure and supply, beggars belief. Thanks very much.