The government has pledged to develop and enshrine in law the objective of the superannuation system by the end of 2016 as part of its response to the final Financial System Inquiry (FSI) report.
"[We will also] consult on legislation to facilitate trustees of superannuation funds providing pre-selected comprehensive income products for retirement [by end-2016]," said the joint statement by Treasurer Scott Morrison and Assistant Treasurer Kelly O'Dwyer.
Beyond 2016, the government will introduce "director penalties", as well as "consult on legislation to improve member engagement, consistent with the recommendations in the Inquiry [and] monitor leverage and risk within the superannuation system".
By the end of 2015, the government will develop legislation to improve governance and transparency in superannuation; progress the Retirement Income Streams Review; and task the Productivity Commission with immediately developing and releasing criteria to assess the efficiency and competitiveness of the superannuation system and with developing alternative models for a formal competitive process for allocating default fund members to products.
The government has pledged to update by mid-2016 the Statement of Expectations for APRA, ASIC and the Payments Systems Board.
On the resilience of the financial system, the government said it would consult on measures to ensure financial regulators "have the tools they need to manage any future financial crisis".
By the end of 2016, the government will require APRA to take additional steps to ensure Australian banks have unquestionably strong capital ratios; and beyond 2016, it will require APRA to ensure the banks have appropriate total loss-absorbing capacity and leverage ratios in place.
When it comes to innovation, the government has pledged to consult on legislation to support crowd-sourced equity funding and crowd-sourced debt financing by the end of 2015.
By mid-2016, it will develop legislation to ban excessive card surcharges and better protect consumers using electronic payment systems; develop legislation to reduce disclosure requirements for 'simple' corporate bonds; and establish an 'Innovation Collaboration Committee', the government said.
The government also pledged to give legal effect to the Asian Region Funds Passport initiative by the end of 2016, as well as "consider technology neutrality in financial sector regulation".
Beyond 2016, it will "facilitate rationalisation of life insurance and managed investment scheme legacy products".
The response by the government comes more than 10 months after the release of the final FSI report in December 2014. The joint statement by Mr Morrison and Ms O'Dwyer said the government has accepted the "overwhelming majority of the Inquiry's recommendations".
"Our response also includes six additional measures that are consistent with the Inquiry's underlying philosophy," said the statement.
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