The Government should extend access to super co-contributions for low to middle income earners in order to encourage Australians under the age of 40 to save for their retirement, according to the Australian Bankers’ Association (ABA).
Speaking at the public inquiry held at the House of Representatives, the ABA’s chief executive David Bell said “a retirement savings gap still exists between the aspirations of Generation X and Y for their standard and living and what the current system will deliver”.
He added: “At least 3 per cent of additional voluntary contributions are necessary for Generation X and Y to achieve adequate retirement income levels. However, there is no point in simply telling people they must save more without simplifying some of the super law and providing incentives.”
Other measures suggested by the ABA included removing the work test for superannuation co-contributions to permit access for the self-employed.
The differences in taxation between employed and self-employed workers should also be scrapped.
The ABA said that reasonable benefit limit (RBL) adjustments were needed to encourage income streams, and that rules which exclude non-superannuation monies from retirement income products should be removed.
The ABA’s superannuation incentive measures have been formally submitted to the Government as part of the Inquiry into improving the superannuation savings of people under 40 by the House of Representatives Standing Committee on Economics, Finance and Public Administration.