Known as the Freedom of Choice bill, the legislation would enable South Australia’s public servants, including nurses, doctors and teachers, the right to choose their super fund in line with federal legislation passed in 2005.
State public servants were excluded from that choice by state legislation.
However, Treasurer Rob Lucas told InDaily he is now in consultation with the state fund – Super SA – about the draft bill and was working through “complicating issues”.
Lucas said he hoped to have the draft for cabinet “sooner rather than later” with Government looking to vote on the bill “by the end of the year”.
He said he wouldn’t comment on “the other issues … that we may well consider about the scheme at the same time”.
“It’s pretty hard to argue against someone who says they don’t want to be locked into a particular superannuation fund,” Lucas said.
“The reality is most members of superannuation funds do have that choice … and we’re sympathetic to the principle.”
A similar bill was proposed by SA-Best MLC Connie Bonaros in 2018 in a bid to “change the current legislative regime” and provide flexibility and choice to consumers.
It followed federal legislation passed in 2005 which allowed Australian to choose their retirement fund and make salary sacrifices for their retirement.
Bonaros said while most states had chosen to opt into the scheme in the years since, South Australia was the only jurisdiction in the country whose public servants were forced to pay contributions into a government-owned fund.
“We are absolutely the last jurisdiction that doesn’t allow for this and I don’t know why… In every other jurisdiction, the scheme has worked fine. The sky hasn’t fallen in anywhere else,” Bonaros said.
“It doesn’t really make sense to force workers to save money in super and then deny them any control over how it’s made.
“The current scheme fails to accommodate for people’s choices when it comes to super … it fails to take into account any ethical or responsible choices they wish to make regarding where their funds are invested.
“It fails to take into account if they self-manage their super, it fails to take into account the transient nature of our super for public service and the fact people move between the private and public service – it just doesn’t make any sense.”
She said the bill would need to provide scope for a public contribution.
“I know that these are the sorts of considerations that the Treasurer has been consulting with Super SA and other bodies on, to ensure that we don’t leave public servants in SA worse off,” Bonaros said.
“You need to allow for a limited public offer because, inevitably during these consultation periods, the government will be looking at how many public servants will be exiting the scheme – so there will be a shortfall in terms of funds in the scheme.
“So, allowing limited public offer … to make up for those lost clients that they would have from those exiting the scheme and allows for the viability and competitiveness of Super SA.”
Shadow treasurer Stephen Mullighan said the State Opposition wouldn’t have a position on any potential changes until a bill had been drafted.
Mullighan said while “giving people a choice is usually a good thing” the alterations may negatively affect South Australian public servant’s preferential tax benefits.
He said currently under the State-run super fund public servants could be better off compared to other funds as a result of the tax treatment.
InDaily contacted Super SA.
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