It
is somewhat ironic that the Federal Government of Paul Keating which undertook
the Hilmer review of Competition Policy also introduced the policy of
compulsory superannuation.
The
Hilmer reforms drove policy reforms through a number of sectors including agricultural
industries with reforms to statutory marketing authorities. A new Regulatory regime was introduced with
substantial reforms to the Trade Practices Act.
While the Hilmer reforms are generally regarded as a success in
increasing competition throughout the economy and therefore contributing to
higher economic growth, a number of industries managed to escape the
reforms.
The
Hilmer report was released in 1993, not long after the commencement of compulsory
superannuation for all Australians in July 1992. The introduction of superannuation is rightly
regarded as one of the great achievements of the Hawke/Keating Government.
Despite
the success of compulsory super, it has created a massive gravy train, secured
by Government mandate to financial industry professionals. It is great industry to be in where this
money just rolls in every month for the industry to invest and skim the cream
off the top. And what is more the
Government has legislated an increase in the level of super from 9 percent to
12 percent by 2020.
The
fees generated for now massive pool of superannuation funds is about $30
billion annually and growing steadily.
Market competition has obviously failed to generate the competitive
marketplace necessary to reduce these fees so the Government must step in.
