Has the Government crimped super savings?

24 January 2018

Most superannuation fund trustees and executives believe the Government’s Budget changes to superannuation will act as an inhibitor to Australians attaining a comfortable retirement.

A survey conducted by Money Management’s sister publication, Super Review, during the recent Association of Superannuation Funds of Australia national conference in Sydney has revealed a deep level of negativity about the long-run implications of the Budget changes, including the $1.6 million transfer balance cap.

The results of the survey coincide with the Australian Taxation Office granting self-managed superannuation fund (SMSF) trustees an extension on their annual returns to deal with the issue.

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The Super Review survey, sponsored by EISS Super, noted that the Government had restricted the amount of money members could contribute to superannuation, and asked what effect respondents believed it would have on balances.

Nearly 90 per cent of respondents believed it would have an effect, with 46.16 per cent stating it would have a significant effect.

The survey also comes as pre-Budget submissions being lodged with the Treasury argue for a speed up in the time-frames for lifting the superannuation guarantee to 12 per cent.

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This left leaning government just like the Labour Party, the Greens, the Industry Fund sector just don't get it.
If they were fair dinkum and wanted the average Australian to be less dependent on the government Age Pension other than those who really have no option, instead of reducing contribution limits and by default tax incentives to save for retirement they should have done the following.
1.Left maximum concessional contributions for those under 55 at $35,000
2. Left the maximum concessional contribution for those over 55 at $50,000
3 Left the maximum non-concessional contribution at $180,000 or 3 years advanced at $540,000
4. Offered everyone irrespective of their super support from employers a 30% tax deduction on contributions up to the concessional limits.
1. The government would be giving very little away because they pick up the 15.0% contributions tax on the way in and up to 15.0% on investment tax, thus expanding the tax base.
The average Australian would be incentivised because even those on the lowest tax rate (20.0%) would be 10.0% better off up front.
Not rocket science in the scheme of things when you think about it.

I think it needs to be more than this. The average retirement fund is still not large enough even when they had these rules in place (and agree current rules are worse) What about a levy on people who do NOT contribute to super, as with medicare. So either you save for retirement, or the government collects a levy to pay for your retirement. But not just the rich, they are already saving for retirement and not getting the pension. It needs to be on everyone who is likely to get the age pension.

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