29 March 2017
Media Release - #2017026, 2017

Productivity Commission releases draft report

In response to the recommendations of the Financial System Inquiry, the Turnbull Government commissioned the independent Productivity Commission to undertake a comprehensive review to assess the competitiveness and efficiency of the superannuation system.

This involves a three stage process: developing performance indicators (Stage One); developing alternative models for allocating default fund members to products (Stage Two); and review the efficiency and competitiveness of the current super system (Stage Three). Stage Three will use the framework developed in Stage One and make recommendations on alternative models in identified through Stage Two.

The Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, notes the release today of the Productivity Commission’s draft Stage Two report, Superannuation: Alternative Default Models.

The draft report outlines four possible alternative models for allocating default superannuation and highlights that the current default model is not working to maximise benefits for members, including their retirement income. The final Stage Two report is due to be released in August this year, with the Stage Three report commencing in the second half of 2017.

“The significance of the superannuation system, which has grown to over $2 trillion primarily through mandatory contributions, cannot be overstated. It is critical that the system is as efficient as it can be so as to provide better outcomes for all Australians,” Minister O’Dwyer said.

“As the report is only a draft, it would be premature for the Government to make any comments on the merits of any specific proposal at this stage. The Government will consider its response in the context of the final report of Stage Two and further Stage Three work.

“I encourage all interested stakeholders, especially young Australians, to continue to engage with the Commission through consultation on the draft report to provide insights into the merits and feasibility of the alternative models proposed.”