Ahead of tomorrow night’s Federal Budget, a leading financial advisory firm has warned that both economic and political uncertainty could have long-term impacts on Australians’ retirement savings.
Dixon Advisory yesterday cautioned that, as superannuation investments were reliant on a strong Australian economy, the super industry could be facing a tough year as the nation heads into a Federal election and possible slowdown in the economy.
Lower profits for Australian businesses would naturally impact the domestic share market, in which super funds tend to have high allocations. There was also potential for an interest rate cut, which could impact those already retired by reducing the income they earn from cash savings and term deposits.
In the face of challenges such as these, Dixon Advisory head of advice, Nerida Cole, said that Australians needed certainty about what policy changes were ahead in the superannuation space before the election.
“It’s vital that the rest of the Protecting Super Package announced in last years’ Budget as well as the is addressed by the Australian Parliament as soon as possible,” she said, also flagging that clarity was needed on how the Productivity Commission’s superannuation report would be progressed.
Superannuation has been used as somewhat of a political football in recent Federal Budgets but there is cautious optimism in the industry that Treasurer Josh Frydenberg won’t do so tomorrow night.