Super tax changes need holistic approach
Equity, sustainability, and the delivery of adequate incomes throughout retirement need to be considered by the Government when considering changes to tax concessions, a super body believes.
The Association of Superannuation Funds of Australia (ASFA) has urged the Government to take a holistic manner rather than isolating specific tax levers.
ASFA chief executive, Pauline Vamos, said there were opportunities to look at the level of tax in the super system but it was vital to consider the objectives of equity, sustainability, and the delivery of adequate incomes throughout retirement.
"Reducing the threshold for a higher rate of tax on contributions to $180,000 in income a year could well be an option that the government is considering," Vamos said.
"People's incomes change over their lifetime — a level of income today may not necessarily be an accurate indicator of retirement savings — and we need to ensure that people have the ability to save for a comfortable retirement.
"The impact of any tax change on future expenditure on the Age Pension also needs to be taken into account."
Previously, ASFA suggested the super system should stop providing taxpayer support for accumulating retirement savings at an account balance of $2.5 million.
ASFA has also called for the retention of the Low Income Superannuation Contribution (LISC) scheme to improve the equity of the system.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
