Superannuation guarantee increase flawed by tax link
The Federal Government should not have linked increasing the superannuation guarantee to 12 per cent to the imposition of the Mineral Resources Rent Tax.
That is the bottom line of a roundtable held yesterday by Money Management's sister publication Super Review, with key participants saying that "superannuation should be treated as superannuation and nothing else".
NGS Super trustee John Quessy said that linking the superannuation guarantee increase to a tax carried with it the risk that another Government would remove that tax and therefore the increase to the SG.
"To make retirement savings dependent on some tax that is popular with the Government at the moment but might not be popular with some other Government in the future means it could subsequently be reversed," he said.
"That could kill the tax and therefore the superannuation," Quessy said. "And if you're serious about superannuation, you treat it as superannuation."
Pillar Administration chief executive Peter Beck said he agreed with Quessy's assessment but said he also understood the Government's need to find a way of funding the rise in the superannuation.
"The Government's problem has been finding ways of funding this, but as an industry we should not express an opinion on where they get the funding from. We should push very hard for the SG contribution being increased and they should find the funding," he said.
Association of Superannuation Funds of Australia general manager of policy David Graus said his organisation agreed there should be no link between a tax and the superannuation guarantee.
"We totally agree it shouldn't be linked, there is enough justification (to increase the SG) on its own," he said.
"ASFA's research shows that it should go ahead on a standalone basis," Graus said.
Deloitte partner Russell Mason said the industry needed to be mindful that 12 per cent would not be enough to fund retirement and relieve pressure on the superannuation guarantee, and that further increases would be required in the future.
AUTHOR
Mike Taylor
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.
