The Australian Labor Party has called for a bipartisan review of superannuation following re-search revealed most Australians believe they are not paying enough super to retire comfortably
The Australian Labor Party has called for a bipartisan review of superannuation following re-search revealed most Australians believe they are not paying enough super to retire comfortably.
Only 26 per cent believe their current level of savings are adequate, according to research by the Association of Superannuation Funds of Australia (ASFA).
ASFA called for a major review of retirement income to be completed within the next year.
Labor’s superannuation spokesman Kelvin Thomson has welcomed the research, calling for a bipartisan overhaul of existing superannuation legislation.
“Labor supports a bipartisan review of retirement incomes,” he says.
“However, we remain concerned that the government has, so far, been big talk, no action on the subject of a retirement income review.”
He said the government had a lamentable record on superannuation, having ripped over $5 bil-lion out of retirement incomes and repeatedly introduced new taxes on retirement incomes.
ASFA says it is imperative a comprehensive, though not drawn out, review be carried out before the next election.
ASFA chief executive Philippa Smith says leaving the review until the next term of office did not meet the urgency of issues now arising, including the recent tax cuts included with the GST.
ASFA’s research also found that most people will not use the extra after tax income for saving.
ASFA’s research also found about 70 per cent believe employer contributions under the super-annuation guarantee, currently at 8 per cent income, would not be sufficient. Most people had very high expectations of what they would need for retirement, with 79 per cent expecting they would need at least half their gross pre-retirement income and 44 per cent expecting more than 80 per cent of their current income.
The research also pointed to possible reform agendas. For example, ASFA says 87 per cent of respondents favoured an initiative in which people contributed an extra one per cent of their in-come to superannuation if the federal government dropped its 15 per cent contributions tax on super.
Break-out with photo
ASFA chief executive Philippa Smith’s reform wish list.
* simplification, particularly of tax issues;
* adequacy;
* relationship with age pensions and private savings, particularly removing anomalies;
* promoting confidence in superannuation;
* reducing the steps and stages where super is taxed; and
* ensuring adequate and easily understood incentives for people to save
