The Morrison government has struck an eleventh-hour deal with the Greens to pass superannuation reforms, which aim to protect low-balance accounts from excessive fees.
The unlikely alliance sparked fury from Labor, with shadow treasurer Chris Bowen and financial services spokeswoman Clare O’Neil savaging the government for ‘gutting’ the centrepiece of the bill.
The government stripped out the part of the bill which would have ended default life insurance for people under 25, as well as low-value or inactive accounts, but remain committed to the policy.
The legislation will return to the lower house next week after passing the Senate with amendments on Thursday evening.
Separate draft laws which cleared the upper house shortly after, designed to improve member outcomes in the superannuation sector, will also return to the House of Representatives for approval.
The government included a royal commission recommendation to create civil penalties for super trustees and directors who fail to act in the best interests of members.
Fees on accounts with $6000 or less will be capped at three per cent, while exit fees will be abolished to remove a barrier to consolidating accounts.
The Australian Taxation Office will get more powers to return lost and unclaimed super, with the agency to use data-matching technology to reunite these accounts with a member’s active account where possible.
Some $6 billion belonging to three million members is expected to be returned to account holders in the first year of the reforms, which come into place on July 1.
The government supported a Greens amendment to retain opt-out default life insurance for people under 25 or those with less than $6000 in their account.
Mr Bowen and Ms O’Neil said the changes would ensure Australia’s youngest superannuation members and those with the smallest balances continue to be slugged with unnecessary insurance fees.
‘At the 11th hour – after months of dysfunction, incompetence, bluster and delay – the Liberals have partnered with the Greens to completely gut their Protecting Your Super package,’ the Labor frontbenchers said in a joint statement.
Finance Minister Mathias Cormann defended the deal, saying the government had secured the passage of substantial reforms even if the bill wasn’t passed in its original form.
‘This is a consensus which will help secure the passage of important reforms for millions of Australians,’ Senator Cormann told parliament.