Govt warned against further delays to lifting the SG
Just weeks out from the Federal Budget, a survey has confirmed continuing strong support for the Government to restore the timetable for lifting the superannuation guarantee (SG) to 12 per cent.
The survey, conducted by Money Management’s sister publication, Super Review, during the recent Conference of Major Superannuation Funds (CMSF) revealed a strong majority of super fund trustees and executives believed restoring the SG timetable would be the most positive outcome from the Budget.
In doing so, the survey confirmed broad cross-industry support for the Government to avoid any further slowing of SG increases, with the Financial Services Council (FSC) having earlier this year used its pre-Budget submission to urge removal of the proposed two-year delay in lifting the guarantee to 12 per cent.
The FSC warned that the proposed two-year delay in the scheduled increase in the SG would undermine the effectiveness of the increase.
“For those who are likely to retire over the next decade, the delay detracts from the forecast $39,000 increase in individual retirement savings that they would otherwise have accrued,” the FSC submission said.
“Significantly, the proposed delay to the phasing in of the super guarantee to 12 per cent will result in a cumulative impact of around $40 billion less in super savings in the system over the next seven years,” it said. “The FSC strongly recommends that there be no further delays to the increase in the SGC to avoid exacerbating inter-generational pressure on public finances resulting from demographic change in Australia’s population.”
The Super Review survey revealed that nearly 60 per cent of respondents believed that restoring the original timetable for increasing the SG should be the Government’s superannuation priority in the Federal Budget ahead of further clearing the way for more sustainable retirement income products.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
