The objective that will be legislated is: “to provide income in retirement to substitute or supplement the Age Pension”.
- From 1 July 2017, a statement of compatibility must be prepared for any Bill or regulation relating to superannuation which sets out how the proposed legislation or regulation is consistent with the objective of superannuation. This will ensure that all proposed changes to superannuation in the future are better aligned with the objective of the superannuation system.
- The Government has also identified subsidiary objectives to support the primary objective of the superannuation system. The subsidiary objectives provide a framework for assessing the compatibility of a Bill or regulation with the objective of the superannuation system.
[Treasury website – super reforms]
[Superannuation (Objective) Bill 2006 – Draft bill]
Subsidiary objectives
1.15 The Government has identified five subsidiary objectives to support the primary objective of the superannuation system.
1.16 These subsidiary objectives are:
- facilitate consumption smoothing over the course of an individual’s life;
- manage risks in retirement;
- be invested in the best interests of superannuation fund members;
- alleviate fiscal pressures on Government from the retirement income system; and
- be simple, efficient and provide safeguards.
1.17 The subsidiary objectives provide a framework for assessing the compatibility of a Bill or regulation with the primary objective of the superannuation system. In assessing the compatibility of a Bill or regulation with the primary objective, there may be tensions between the subsidiary objectives. Policy makers will need to balance these objectives. For instance, facilitating consumption smoothing over the course of an individual’s life will need to be weighed against fiscal pressures on Government.
1.18 Addressing the subsidiary objectives in the statement of compatibility will produce a more comprehensive assessment and would be best practice.
[Superannuation (Objective) Bill 2016 – Draft EM]
[LTN 173, 7/9/16]