I am pleased today to announce that the Government has secured an agreement with the Australian Democrats to support the passage of the Choice of Superannuation Fund Bill 2002 through the Senate.
The Coalition has a long-held commitment to a superannuation system that is safe, easily understood and one that encourages financial self-reliance. The agreement that the Government has reached with the Australian Democrats on superannuation choice is a major step toward achieving this commitment.
Choice of superannuation fund is a key component in the Government's plan to deal with the challenges of an ageing population. Over time, it is expected that superannuation choice will contribute to an attitudinal shift, whereby Australians take a more active interest in the management of their retirement income.
It is designed to increase competition and efficiency in the superannuation industry, and ultimately lead to improved returns on superannuation savings and downward pressure on fund administration charges.
There is also a strong moral argument that individual Australians should have a say as to where superannuation contributions made on their behalf are invested.
The Government has already introduced measures to provide for portability of superannuation benefits. The portability arrangements commence next month and will allow individuals to move funds out of inactive superannuation accounts into their current fund.
The superannuation choice arrangements will complement the portability arrangements, allowing individuals to direct future superannuation contributions into a fund of their choice.
In view of the significance of the superannuation choice policy to many Australians with superannuation savings, a substantial consumer education campaign will be necessary ahead of commencement of the superannuation choice arrangements on 1 July 2005.
Following discussions with the Australian Democrats, a five-person advisory committee will be established to propose key messages for the education campaign. This campaign will roll out no earlier than four months before the commencement of the new superannuation choice arrangements.
The Government has also agreed to commit at least $2 million in seed funding to a consumer information centre or alternative identified by the Consumer and Financial Literacy Taskforce.
As part of the agreement with the Democrats, the Government has agreed to task either the Australian Securities and Investments Commission or the Australian Prudential Regulation Authority with the job of collecting and reporting on the disclosure of fees and superannuation charges.
This will occur in each of the first five years following the commencement of the superannuation choice arrangements. It will complement the reforms announced last week by the Parliamentary Secretary to the Treasurer on the uniform disclosure of fees and charges by superannuation funds.
Today's announcement builds on several recent superannuation initiatives including the generous superannuation co-contributions measure which sees the Government making matching payments of up to $1,500 per year to those who are eligible and make additional voluntary superannuation contributions of their own.
Superannuation is good for individual Australians, giving them greater control over their own future.
Superannuation is also good for the nation. A strong superannuation system will deliver long-term benefits and make Australia financially stronger.