Superannuation fund lobby groups are emphasising that lifting the superannuation guarantee (SG) to 12% in 2025 has already been legislated in the face of suggestions that the Government’s Review of Retirement Incomes may see the SG not rise beyond around 10%.
Both Industry Super Australia (ISA) and the Australian Institute of Superannuation Trustees (AIST) emphasised that the SG was already legislated but a number of Opposition back-benchers have questioned whether the rise to 12% is still warranted and one of the people appointed to the Review board, academic, Deborah Ralston has been quoted as questioning the move.
A report in the Australian Financial Review quoted Ralston as suggesting that increasing the SG would force low-income earners to forego too much money while also suggesting the Government should end tax concessions for those multi-million dollar balances.
Ralston is chair of the SMSF Association and one of three people appointed to the Government’s inquiry.
The three-member panel, announced by the Treasurer, Josh Frydenberg, has been handed broad terms of reference around establishing “a fact base of the current retirement income system that will improve understanding of its operation and the outcomes it is delivering for Australians”.
The terms of reference empower the Review to identify:
- How the retirement income system supports Australians in retirement;
- The role of each pillar in supporting Australians through retirement;
- Distributional impacts across the population and over time; and
- The impact of current policy settings on public finances.
AIST chief executive, Eva Scheerlinck, welcomed the broad nature of the terms of reference but made clear that the lifting of the SG to 12% by 2025 had already been legislated and that it would significantly improve the adequacy of retirement incomes for all Australians.
However ISA chief executive, Bernie Dean, whilst also making clear the legislated status of the 12% SG, reinforced the need to continue the push to remove under-performing superannuation funds.
He said that the question of underperformance should not be sidelined while the review took place.
The Financial Services Council (FSC) has also called for the SG to remain targeted at 12% and also urged against further tax increases on superannuation “because the system, as measured against Organisation for Cooperation and Development standards, is not unfairly beneficial to higher income earners”.