Major parties on notice over super tinkering

Tinkering with superannuation may have proved fundamental to undermining the Government's performance in Saturday's Federal Election, according to Express Super and SuperGuardian chief executive, Olivia Long.

Long said she believed a clear message had been sent to all political parties that they would continue tinkering with superannuation at their peril.

What is more, Long believes that the danger crosses party lines and that although the Coalition Government felt a voter backlash, it could just as easily have been felt by the Australian Labor Party.

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"The reality is both the major parties were culpable as Labor included these savings in its fiscal estimates," she said.

"What the electorate has rightly discerned is that superannuation is increasingly being seen by all the political parties as a cash cow that can be milked for fiscal reasons."

"However, what we have seen in the election is that many of the people have said ‘enough is enough', and that there will be an electoral cost if you continue to change the policy settings by which people plan their retirement income strategies," Long said.

She said that SMSF trustees were already being confronted by difficult times in dealing with volatile investment markets, and these problems were being compounded by having to continually second-guess what the Government would do with superannuation policy.

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Too many people claim to refrain from investing in superannuation stating Governments can and do change the rules too often. In the past I have always been able to counter this proposition by saying that adverse changes are always given plenty of notice and it has become customary for people already in the system to be grandfathered. Lately there have been too many changes many of which have been adverse. Even administrative changes having no direct impact on superannuation members are reported and perceived as changes. Even worse perceptions are created by ill informed reporters and politicians making out of context comments.
Superannuation should be about the sole purpose test - providing for people in retirement. While the taxation treatment of superannuation money is an important element it should not be a primary purpose for adverse change. Olivia Long is correct in her observation that tinkering with the system and restricting the ability of people to save for their retirement and to protection their families in the event of their premature death is an emotional issue and is self defeating in that many people will not trust and use super for their retirement savings. A step too far was taken in making changes encompassing past contributions and the electorate reacted.

It should be taken out of the political sphere, and have a ruling arbitration/policy type think tank that govts must work with to set policy, with members being apolitical and widespread amongst industry

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