ECT changes not good enough

The Federal Government has run into flak from a wide cross-section of the financial services industry with suggestions that the Budget measures to address the excess contributions tax problem do not go far enough.

Those critical of the extent of the Government’s approach included the Australian Institute of Superannuation Trustees and major accountancy and consulting firm Deloitte.

Deloitte Superannuation partner, John Randall described the Budget initiative on the excess contributions tax as “only a temporary band-aid”.

“In our view the Government has missed an opportunity to provide a workable solution to the excess concessional contributions tax problem,” he said. “At an industry level it is like using a band-aid for a severed artery – it won’t stop the bleeding as many breaches of the concessional contributions caps on an ongoing basis are due to circumstances that are usually outside an individual’s control.”

Randall said that, at the very least, the Government should have extended the relief to every year, rather than just the first year, in which a breach of the cap occurred.

He said the situation would only become worse for affected individuals as salaries increased and the compulsory superannuation contribution rate increased to 12 per cent.

Earlier, AIST chief executive, Fiona Reynolds (pictured) said her organisation also held concerns that the measure would only be available once and that her organisation would be pressing the Government to allow for the measure to be ongoing.