The Association of Superannuation Funds of Australia (ASFA) has called for the debate around superannuation tax concessions to be based on accurate data.
In a statement which appears aimed at countering suggestions that the tax concessions applied to super might cost the Budget up to $32 billion this year, ASFA chief executive Pauline Vamos said the debate needed to be based on accurate information on the actual value and context of the concessions.
"While it's important we have a conversation about how the system can be adjusted to accommodate the demands posed by an ageing population who are living longer and have higher expectations of the lifestyle they will have in retirement, it's important that we get the facts right," she said.
Further, Vamos claimed that analysing the tax concessions applied to super was not as simple as just looking at the Tax Expenditure Statement.
"It's important that all relevant factors are taken into account, to generate a more accurate picture of the incentives the Government provides to help people save for their retirement," she said. "…This includes taking into account that the Government is currently saving $7 billion annually in Age Pension expenditures as a result of super.
"These Budget savings will only increase as the system matures and more and more people have adequate super balances to self-fund their retirement," Vamos said.
"Policy discussions also have to incorporate the likelihood that if savings are not put into super, these funds will go into other tax-advantaged areas such as negative gearing. This would mean a reduction in the final tax savings generated for the Government as a result.
"After considering the impact of these factors, the actual tax concessions received by the community on their super drops to around $16 billion per annum.
"Importantly, this is money that is going towards a diversified, well-regulated pool of the community's retirement savings. This will deliver many benefits to individuals, governments and the economy now and into the future," she said.
Originally published by SMSF Essentials.
