This week I’m doing a special Q&A with the Minister for Revenue and Financial Services, and the Minister for Women, Kelly O’Dwyer.
Your old boss, Peter Costello, says he regrets not doing more to lower fees on compulsory superannuation. Would you consider tendering out a default fund and making the big institutions bid ‒ lowest fees wins?
“I actually think Peter made some very good points.
“It’s very, very clear to me that for far too long people have been ripped off. Super funds need to understand that it’s not their money ‒ it’s their members’.
“Look, this cosy, opaque system that we’ve had for many years has come to an end. That’s why in the Budget we got rid of exit fees … because it was a barrier to switch. Our job as the government is to make sure that people’s money is protected and ensure they’re not going to be gouged with fees and charges.”
Women and Money
You have an interesting remit ‒ responsible for financial services and women. We know women retire on less than men, around $120,000 less. What can you do to change that?
“When it comes to super, we know that our Budget changes means that 2 million women will have their super balance protected from being charged inappropriate insurance.
“Another 1.3 million women’s super balances will be boosted by $2.5 billion by our plan to cap fees on small balances to 3%, and actively charging the ATO to reunite people with their lost and inactive super.
“These are very practical measures that are good for women. However, this is a passion of mine, and I’ll have a lot more to say about it in the Economic Security Statement in spring.”
Insurance and Young People
I applaud your decision to stop people under 25 being compulsorily charged insurance within super. However, the big insurers say it will increase premiums across the board by 30%. What do you say?
“I say that young people are being exploited and used as a cash cow for the entire pool of users.
“And I think that’s wrong.”
The Royal Commission
The Royal Commission has shown us that there are deep-seated cultural problems in the finance industry. How does the industry win back trust?
“There’s no question trust is at an all-time low.
“However, understand that the majority of people employed in the industry ‒ some 400,000 people ‒ are actually going about their day and doing a good job.
“The real responsibility falls on those that are in charge ‒ the boards ‒ and the CEOs need to ensure that they act with integrity. And if they don’t, we need our regulators to keep them accountable. That’s why as a government we’ve said if they are caught out doing the wrong thing, they can be put out of business, or put in jail.”
Thank you for reading,