Misperceptions surrounding the equity and sustainability of superannuation tax concessions need to be corrected, if the Government wants to have a discussion on the issue, the Association of Superannuation Funds of Australia believes.
Welcoming calls for a debate, ASFA chief executive, Pauline Vamos, said it was important that myths surrounding super tax concessions were debunked to enable the Government and community to have “an informed debate”.
“There have been a number of incorrect claims made regarding the cost and distribution of superannuation tax concessions,” she said.
“In reality, superannuation is boosting incomes and lifestyle standards in retirement at a relatively low cost to government expenditure.
“When both super tax concessions and availability of the Age Pension are taken into account, government assistance for retirement income is broadly equitable across the range of incomes in the community.”
Vamos said ASFA had issued an updated paper debunking common myths about superannuation, in a bid to support “an informed debate”.
The paper refuted claims that super was not helping to reduce expenditure on the Age Pension, reporting that “super saves the Government $7 billion” a year, while highlighting that “the bulk of tax concessions for superannuation concessional contributions go to middle-income earners”, and not high-income earners as has been claimed.
The paper also rejected the myth that “most people take a lump sum for their super when they retire, spend it on a big holiday… then end up on the Age Pension”.
“There is no evidence that the majority of retirees are using their super to pay off debt or using a lump sum to fund the purchase of boats, cars and overseas trips before going on the full Age Pension,” ASFA said.
“The vast majority of Australians are very sensible with what they do with their retirement savings.”
