ASFA calls for balanced debate on super concessions
The Association of Superannuation Funds of Australia (ASFA) is calling for media to “get the facts right” after news outlets reported tax concessions on super would cost the budget up to $32 billion this year.
ASFA chief Pauline Vamos said that while there had to be debate on how to cope with an ageing population that was living longer with higher expectations, it had to be based on accurate figures and within the context of the concessions.
“Analysing the tax concessions applied to super is not as simple as just looking at the Tax Expenditure Statement,” Vamos said.
“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. The bottom line is the system is sustainable for the medium-term so there is time to have a measured and informed debate.”
This debate should include consideration of the fact that the Government currently saved $7 billion annually in age pension costs due to super.
The comments follow media reports that superannuation concessions such as investment earnings, including capital gains, are exempt from tax if they are from assets supporting superannuation pensions, forgoing $32.1 billion in revenue.
Deloitte-Access Economics’ Chris Richardson argued the wealthy would gain the most out of it.
He said superannuation concessions were needed but were inequitable and needed reviewing.
Vamos also said savings that are not put into super can go into other tax-advantaged areas such as negative gearing, which reduces the final tax savings created for the Government.
After taking this into consideration, the community’s final tax concessions on super drops to about $16 billion, she said.
“The policy focus should be on closing the gaps in the system, and ensuring that governments provide appropriate incentives for people to save for their retirement across all income brackets.”
Recommended for you
Data and technology provider Novigi has acquired Iress’ superannuation consulting and managed services business from Apex Group.
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
