9 March 2016
Transcript - #2016026, 2016

Interview with Tom Elliot, 3AW Drive

SUBJECTS: Objectives of superannuation; the Budget.

TOM ELLIOT:

Assistant Treasurer Kelly O'Dwyer good evening.

MINISTER O'DWYER:

Good evening, Tom.

ELLIOT:

Now you have put out a discussion paper today and I’ve read a bit of it and it’s consultation on the objective of superannuation. I’ve been contributing to super for over 20 years and I’d always thought that super was there to live in my retirement. Why do we need to ask this question?

MINISTER O’DWYER:

I think you’re absolutely right that it is there to provide for your retirement income Tom, but I think unfortunately so many people have very different views on what superannuation is there to do. It is very timely after the Murry Inquiry – financial system review – to actually enshrine in legislation the objectives of super. The reason that it’s important to do this is it means that we can compare competing superannuation proposals, we can have a proper framework for discussions about fairness, and adequacy and sustainability in superannuation…

ELLIOTT:

When you say there’s different views though – for example one of my producers wants to take all of his super out and use it to reduce his home loan aged 30 – now I assume that’s one of those sort of out there ideas, but what are some of the different views about what super is supposed to be for?

MINISTER O’DWYER:

Well I think there are some people, and you’re quite right, as your producer would like to do, who would like to be able to dip into their super for different purposes. There are also some people who see our national savings, in the form of superannuation, as something that they can dip into for their various pet projects…

ELLIOTT:

I see, if one of your colleagues wants to turn all the rivers inland and build a new city in the outback they might try to tap into our super to do it?

MINISTER O’DWYER:

Well I very much doubt that one of my colleagues would suggest that Tom, but your overarching point is absolutely correct. We need to be clear that super is money that people are forced to save. It’s their money and it should be there for them. We need to be very clear that the objectives are to prepare for a retirement income. It should be to substitute or supplement the aged pension. And we need to provide stability in the superannuation system so that governments – beyond our government – will have the clear and same objectives as us and will be able to provide people with confidence in the superannuation system as a whole.

ELLIOTT:

The cynical side of me, which is a fairly big side, says that you're asking this question because we're about to change the rules or the tax regime of super again. Is that in the offing, in the upcoming Budget, of which you are an important part?

MINISTER O’DWYER:

Well look, Tom, it's actually as a result of the Financial System Inquiry. We accepted that recommendation last year when it was handed down. One of the recommendations was to enshrine the objectives of superannuation. We're following through on that. And we believe that any potential changes on superannuation need to be measured we’re following through on that. And we believe that any potential changes to superannuation need to be measured against the key objective. Some of the announced changes that have been made are in relation to world’s best governance standards. That again was part of the Murray Review. We believe that it is entirely appropriate that people who are forced to have their money saved for them need to know that that money has been properly protected and again, that that goes to their retirement income.

ELLIOTT:

Can I put a suggestion to you; you quite correctly said retirement income. One of the big problems with super, as I see, it is that people at the end of their working lives can choose to take their super out in a lump sum. What I see too often is they use the lump sum to upgrade the home, they give some to the grandkids, and they go on a trip and then they come back and say, righto we haven’t got any more income, we’ll go on the pension. Could you make taking your super as an income stream, rather than a lump sum, the focus of attention?

MINISTER O’DWYER:

We certainly know that there haven’t been the suite of options available to people to actually take an income stream that would otherwise be available because of some of the regulations that have been put in place that have thwarted that. We’ve had a retirement income stream review that looked at that question. The Government will be responding to that very shortly and will have more to announce on that when we do.

ELLIOTT:

Final question, you may or may not know that every year I speak at the NAB Budget Breakfast. I was contacted this morning saying could I make sure I’m available a week earlier because of the rumours that the Budget is going to take place – this is not a joke, I’m serious – I blocked out an extra morning in my diary a week before the normal release of the Budget. Are you going to an early Budget and therefore an early election?

MINISTER O’DWYER:

The Budget has always been held in May and will continue to be held in May.

ELLIOTT:

Yeah but will it be held on the third of May rather than on the tenth of May?

MINISTER O’DWYER:

I really don’t know why there is all this speculation. The ordinary timetable is what we’re working toward.

ELLIOTT:

Right, so I don’t need to worry about keeping that morning clear a week earlier in my diary?

MINISTER O’DWYER:

I don’t think you need to worry too much about it Tom.

ELLIOTT:

Kelly O’Dwyer thank you for joining us.