YFYS passed House of Reps with ‘Power to Ban’ removed
As covered the Policy Alert of 2 June, the Your Future, Your Super legislation, which delivers the most significant and widely-opposed changes to superannuation since the super system started, was passed with one amendment by the House of Representatives today.
The Government moved an amendment that was incorporated as part of the final Bill that was passed, which removed from the legislation the controversial section 117A 'Power to Ban' which would have allowed the Treasurer to ban investments and expenditure by super funds.
Other amendments to the Bill were moved by Craig Kelly MP, Zali Steggall MP and the ALP but they were not passed.
At this stage there has been no change to the commencement date of the legislation nor any changes other than removal of Section 117A.
The Bill passed (with amendment) 66 votes to 62 and will now progress to the Senate. The earliest the Bill can go to the Senate is 15 June.
While AIST welcomes the Government’s belated recognition that the ‘power to ban’ provision was flawed and a case of unprecedented overreach, we will continue to argue that the bill must be abandoned to avoid millions of Australians being stapled to underperforming and untested super products.
Family law super changes welcomed
The release of exposure draft legislation this week to help identify super assets by parties to family law proceedings has been warmly welcomed by AIST, Women’s Legal Service Victoria (WLSV) and Women in Super (WIS).
The long-awaited draft legislation provides for a party to family law property proceedings to apply to the court to request their former partner’s super information from the ATO. The ability for the ATO to share this information is considered critical in preventing family violence perpetrators from hiding their superannuation assets when they were going through the family law courts.
This new information-sharing process was first recommended by WLSV in their Small Claims Large Battles report in 2018. While the Government had promised to introduce the required legislation in the middle of last year, this has been delayed until now.
In a media release this week to welcome, AIST CEO Eva Scheerlinck called on Parliamentarians to pass the legislation quickly, in the August sittings, noting it would make a significant difference to the financial wellbeing of women going through difficult separations, or escaping abusive relationships.
“Superannuation is often the biggest – or only – asset in a relationship. Importantly, this new measure will speed up what can be a very difficult process. Providing a single, reliable source of truth about which super funds their former spouse is a member of will make it much harder for parties to hide or under-disclose their superannuation assets,” Ms Scheerlinck said.
Green light for Financial Regulator Assessment Authority
Legislation establishing the Financial Regulator Assessment Authority to assess and report on the effectiveness and capability of both APRA and ASIC has passed by both Houses of parliament and is awaiting Royal Assent.
The Financial Services Royal Commission recommendation 6.14 was for a new financial services regulator oversight body. The FSRC called for a new authority for APRA and ASIC, independent of Government, be established by legislation to assess the effectiveness of each regulator in discharging its functions and meeting its statutory objectives.
The Financial Regulator Assessment Authority Bill 2021 and the Financial Regulator Assessment Authority (Consequential Amendments and Transitional Provisions) Bill 2021 give effect to this recommendation.
Recommendation 6.13 recommended that APRA and ASIC be subject to at least quadrennial capability reviews. Recommendation 6.14 recommended that a new authority be established to assess the effectiveness and capability of each regulator.
The FRAA will be required to evaluate both ASIC’s and APRA’s effectiveness and capability every two years and to undertake other specific investigations at the request of the minister. This more than fulfills FSRC recommendation 6.13 for financial service regulator reviews to be undertaken at least every four years.
Temporary Super Pension drawdown relief extended
As outlined in an AIST policy alert earlier this week, the government has announced that the temporary reduction in superannuation minimum drawdown rates for super income streams has been extended for a further year to 30 June 2022.
Superannuation minimum drawdown rates were reduced by 50 percent for the 2019-20 and 2020-21 income years, and have now been extended to the 2021-22 income year.
This applies to account-based pensions and annuities, allocated pensions and annuities, and market-linked pensions. The legislative instrument to give effect to this change has not yet been released.
AIST’s weekly update on the status of legislation
Stay up-to-date on the current status of superannuation Bills currently before Parliament here.