The Federal Government needs to be careful that it does not sacrifice national retirement savings to appease calls for more taxation on super, according to Financial Services Council (FSC) chief executive, Sally Loane.
Amid a continuing campaign by the FSC to help shape the superannuation tax concessions debate, the released PwC modelling which shows that one idea being considered – a tax rebate of 15 per cent for superannuation contributions – would diminish retirement savings and increase reliance on the age pension for the vast majority, 80 per cent, of Australians.
It said that if a rebate model was to be adopted, the FSC’s modelling showed that the rebate would need to be at least 20 per cent and the superannuation guarantee (SG) would need to rise to 12 per cent from the current rate of 9.5 per cent.
“This model would deliver increased savings for middle Australia, those earning up to $80,000, while the better off would be taxed slightly more,” the FSC statement said.
Loane said that while the Government had not yet spelled out what it wants to do with the tax treatment of superannuation, if there were changes the FSC was urging close consideration of options which delivered better retirement savings outcomes for the majority of Australians, those in the lower to middle income groups.
“Option that leave Australians worse off in retirement and even more dependent on the age pension should be discarded. Options that raid superannuation savings to fund other projects or fill Budget holes, must not be considered,” she said.
