A moratorium on changes to superannuation tax policy resembles “a straight jacket approach,” according to the Institute of Chartered Accountants Australia (ICAA).
“What we want is a commitment from government that they will refrain from using superannuation as a budgetary tool to balance the books,” said Liz Westover, head of superannuation at ICAA.
“At some point in the next five years, there may be a compelling reason for change and we need the flexibility within the current legislative framework to enable this to happen.
“With an ageing population and difficult fiscal circumstances, this will be one of the major challenges for the next term of government.”
In an address to the Financial Services Council conference in Brisbane this morning, Shadow Minister for Financial Services Mathias Cormann said the Coalition will not agree to support Labor's proposal to freeze changes to superannuation on a five-year basis.
In addition, the five-year freeze has been labelled by Senator Cormann as an attempt to “catch up” with Coalition super policies.
Senator Cormann also said Labor’s rule-out of any change to the super system is “irresponsible”.
“A total commitment to no change at all would mean that the current lack of competition in the default funds market would remain entrenched and that there would be no capacity to improve corporate governance arrangements in line with relevant Cooper Review recommendations,” he said.
“It would also mean no opportunity to re-visit the level of concessional caps or super co-contribution benefits for low income earners, which under Labor are way too low.”
However, the Superannuation Professionals’ Association of Australia (SPAA) has welcomed the announcement, with chief executive officer Andrea Slattery saying continual change to super structures acts as a disincentive for Australians to save for their retirement.
“The commitment by the government and opposition to both make a commitment to no detrimental change is a step in the right direction to achieve bipartisan support for a more sustainable superannuation system,” Ms Slattery said.
Ms Slattery added the commitment to not change super tax policy should help restore confidence in the super system.
In addition, the Institute of Public Accountants’ chief executive officer Andrew Conway told SMSF Adviser he is pleased the Treasurer has recognised the super sector is “fatigued” by constant change.
“We trust that the Treasurer’s announced moratorium on superannuation changes extends to the growing $505billion-plus SMSF sector,” he said.