Industry critical of Federal Budget
The Federal Budget has won little praise from the financial services industry and much criticism for the manner in which it has risked undermining confidence in superannuation.
Virtually all of the major accounting groups were critical of the Budget changes, while the Financial Services Council (FSC) warned that the Budget "hits at every saver aged over 50".
FSC director of policy Martin Codina claimed the Government had again confirmed that it was "willing to use retirement savings to pay for other political objectives".
"This is the ninth time since 2008 the Government has changed the rules, equating to $7.8 billion less in retirement savings," he said.
The Financial Planning Association expressed similar concerns, with general manager of policy and government relations Dante De Gori warning that superannuation was being used as a political tool at the cost of consumers.
BT Financial Group head of superannuation and platforms Melanie Evans was also critical, and urged anyone concerned about the Government changes to see a financial adviser.
She said superannuation remained one of the most tax-effective forms of saving, but people needed to feel confident that the goal posts would not keep moving before they contributed more to super.
The Self-Managed Super Fund Professionals' Association, while welcoming some elements of the Budget, agreed that it risked undermining confidence in superannuation, while Mercer's Managing Director, Australia and New Zealand, David Anderson said continual changes to superannuation would "unfortunately create a wave of uncertainty, confirming the commonly held view that superannuation is an irresistible honey pot".
RSM Bird Cameron principal Peter Nicol was also scathing of the Budget approach to superannuation.
"Reviews of the budget announcements reveal nothing new, or should I say nothing that was not common knowledge already or had already been announced," Nicol said. "Superannuation has and always will be a pot of gold for governments, especially when looking for ways to find a surplus."
Reflecting earlier cautionary words from the Australian Institute of Superannuation Trustees, the chief executive of big industry fund Rest, Damian Hill, said the tax hike on the super contributions of wealthy Australians "may have an unintended consequence of imposing higher costs on the nest eggs of low income earners".
He said the implementation of the change was critical, and the Government should take heed from the super surcharge introduced in 1996 which was such an inefficient tax that it cost some funds more to administer than was collected by the rise.
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