Monday, July 11, 2016

PM must restore stability and community confidence - says super fund boss Ian Silk

Australia's biggest superannuation fund says the newly-elected Turnbull government needs to re-establish political stability to regain the confidence of the community.

Ian Silk, chief executive of AustralianSuper, says it's now imperative that the Prime Minister send a positive message about stability after several years of uncertainty under both Labor and the Coalition.

AustralianSuper chief executive Ian Silk with the ABC's Peter Ryan

"I think that's the number one task - to establish some political stability and regain the confidence of the community," Mr Silk told The World Today.

"Obviously the rise of the independents and the minor parties in the Senate is reflective of a community that is seeking strong leadership and a clear direction for the country."

But with two million members and a $100 billion dollars of superannuation funds under management, AustralianSuper worries that navigating the makeup of the new parliament and a fragile Senate will be "challenging" for the Prime Minister.

Mr Silk also cast doubt on the government's proposed corporate tax cut for small business which is expected to be revised after the global ratings agency Standard and Poor's put Australia's AAA rating on a negative outlook.

""I think the prospect of the company tax cut even being legislated is remote," Mr Silk said.

"Even if it was, I don't think there are too many people who thought a decade long company tax program would actually be implemented without any changes over that period."

However, business groups are urging the government to maintain the proposed corporate tax cut despite the warnings about the need for budget repair.

James Pearson, chief executive of the Australian Chamber of Commerce and Industry, told AM  the tax cuts remain justified.

"We still support that. It makes just as much sense today as it did before the election," Mr Pearson said.

" I think it's a phony choice to say it's about cutting spending or raising taxes.

"It's a moderate measure. It comes in over 10 years, and it starts off with small businesses. And the benefits as shown by Commonwealth Treasury research flow overwhelmingly to households."

But Mr Pearson agrees that despite Mr Turnbull's narrow win, the new parliament is an opportunity to build new stability.

"There's no doubt that the Senate which has been elected, it will be a much more diverse body than it was before," Mr Pearson said.

"The degree of difficulty may well have gone up but business is ready to build a constructive relationship with the new crossbenchers and the old, and we'll do so with genuine goodwill.

The responsibility is on all politicians, be they Government, Opposition or on the crossbenches. We cannot afford another three years of policy gridlock."