The financial planning industry has welcomed the Government’s proposal to raise the superannuation guarantee from 9 per cent to 12 per cent.
Assistant Treasurer and Minister for Financial Services and Superannuation Bill Shorten yesterday introduced to parliament the Superannuation Guarantee (Administration) Amendment Bill 2011, which proposes to use income from the mineral resources rent tax to fund the increased SG and abolish the age limit for SG contributions.
Both Financial Planning Association (FPA) chief executive Mark Rantall and Association of Financial Advisers (AFA) chief executive Richard Klipin pointed to the country’s ageing population as a key reason why an increase in the SG was necessary.
"Without an increase in the superannuation guarantee, Australians will need to extend their working life to be able to retire on an adequate income, or will have to rely on the age pension," Rantall said.
"By 2047, 10 years after maturation of the superannuation guarantee system, 75 per cent of the population will still be on some form of the age pension. It is critical that this national issue is addressed now."
He said the FPA also supported removing the age limit for SG contributions, and the Government should encourage all Australians to accept responsibility to save for retirement.
Klipin congratulated Shorten on what he described as "an important step forward" and relieving what could potentially become a crippling tax burden in the future. Financial advisers are well positioned to help people deal with larger superannuation balances and work with them to meet their retirement goals, he added.
The amendment bill was also widely welcomed by the superannuation sector, including Association of Superannuation Funds of Australia chief executive Pauline Vamos; Australian Institute of Superannuation Trustees chief executive Fiona Reynolds; Self Managed Super Fund Professionals’ Association of Australia chief executive Andrea Slattery; chief executive of $42 billion industry fund AustralianSuper Ian Silk; REST Industry Super chief executive Damian Hill; and Challenger’s chairman of retirement income and former Super System Review chair Jeremy Cooper.
