National Commission of Audit Report
The Government has released today the report of the National Commission of Audit. The
Commission was established to review and report on the performance, functions and roles
of the Commonwealth government. The Government is considering the recommendations
and the Minister for Finance has said that its response will be in the Budget on 13 May. It is
important to recognise that these are recommendations only – they may or may not be
implemented by the government.
The ‘fiscal rules’ the Commission proposed be adopted by Government are:
(a) Achieve a surplus of 1% by 2023/24;
(b) Substantially reduce net debt over the next decade; and
(c) Ensure tax receipts remain below 24% of GDP.
From CSC’s perspective, there are several important recommendations and proposals:
Close Military Super to new entrants.
Establish a new accumulation plan for new Australian Defence Force members.
The Government should move over time to a ‘funded’ model for its defined benefit
schemes, where the employer contribution would be paid to the superannuation
trustee, the Commonwealth Superannuation Corporation, rather than retained in
consolidated revenue. This is the arrangement the Commonwealth currently follows for
its accumulation schemes.
In recognition of the upfront costs of a ‘funded model’ approach, the Government
should consider allowing earlier drawdowns from the Future Fund to offset the costs of
the new military accumulation scheme and future funding of existing defined benefit
Extend the current phased increase in the preservation age by an extra four years so the
preservation age reaches 62 by 2027.
Increase the preservation age in conjunction with the Commission’s proposed increases
in the Age Pension age thereafter – ie 5 years below the Age pension.
Consider consolidating ComSuper into the Commonwealth Superannuation Corporation,
which is its only client.
1 May 2014