The Federal Budget should have included broader tax relief to encourage the rationalisation of expensive superannuation products, the Financial Services Council (FSC) says.

The Government has a long-standing commitment to product rationalisation in the superannuation space. However, it has only provided tax relief for merging super funds to reduce costs for members.

“A lack of reform in this area means consumers are locked into older, more expensive products,” the FSC says.

The Government has repeatedly stated it is banning grandfathered life insurance commissions to advisers because they entrench consumers in older products when newer, better and more affordable products are available.

Canberra will also provide more than $550 million over four years to the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulatory Authority to enhance oversight and enforcement capacity.

A major slice of the money will come from ASIC’s industry funding model, which the Financial Planning Association says will add to consumers’ financial advice costs.