A senior superannuation specialist within Macquarie Bank is advocating a simplification of superannuation arrangements to make them easier for financial advisers and their clients.
As well, Macquarie Adviser Services head of technical services David Shirlow is arguing that all working Australians should be able to benefit from the tax deductibility of personal superannuation contributions.
Shirlow is suggesting extending the deductibility of employee contributions alongside complementary means-tested rules on eligibility for the Government co-contribution.
He said in this way the Government could ensure that the tax concessions were distributed fairly to all Australians, taking into consideration their various income levels, individual tax rates and fund tax rates.
Shirlow said the level of co-contribution should be graduated according to the applicable tax brackets to ensure the value of the tax concession was appropriate to the individual’s income.
He said this approach was preferable for a number of reasons, including that it would involve a substantial reduction in the complexity of superannuation rules for both fund members and financial advisers.
Shirlow said this was because it removed the need to distinguish between employee workers and others, using what was known as the 10 per cent test, which distinguishes whether or not 10 per cent of an individual’s earnings are generated from work as an employee.
He said that while there would be a considerable revenue cost in extending tax deductibility to all personal contributions, it was consistent with the Government’s desire to boost retirement savings and to improve the availability of co-contributions.