Speaking to SMSF Adviser, Taxpayers Australia’s superannuation products and services manager Reece Agland said it appears that superannuation was largely not on the Commission of Audit’s agenda, particularly when contrasted with the lead-up to the previous Budget.
“The government promised at the last election not to touch super without warning, so they stuck to that promise,” said Mr Agland.
However, he warned that superannuation is likely to be on the government’s fiscal agenda in the longer term.
“When you look at the fact that the top 10 per cent get 30 per cent of the benefits, there is an issue there; if they’re cutting the pension or dealing with the pension, they’ve also got to deal with the top end of the market,” Mr Agland said.
“I suspect [the government won’t] do anything now, but going to the next election they’ll need to have some sort of policies addressing the taxing issues in relation to super.
“I think the [issue] of tax-free earnings in retirement, particularly for high wealth individuals, that might have to be looked at again. And a more efficient means of taxing, that is probably what they’ll be looking at.”
One of the superannuation-related changes recommended by the Commission of Audit was increasing the super preservation age to five years below the age pension age, to complement changes being recommended for the age pension.
However, the SMSF Professionals’ Association of Australia’s director for technical and professional standards told SMSF Adviser this move is unsurprising.
“The alignment of the preservation age with five years younger than the pension age, we could probably have seen that on the horizon irrespective of which government would be in power,” Mr Colley said.
“Measured debate” is essential regarding the issue of superannuation and the age pension, he added.
“Our nation, and particularly future retirees, will be best served by mature and reasoned consideration of the issues rather than seeking out silver bullets such as simply aligning preservation age with an increased age pension age,” Mr Colley said.
The Government needs to make life much easier for retired people to save for longevity because:
1. There are numerous countries we can choose to retire, other than Australia,
2.Places where it is much cheaper to live in retirement.
3 We chase away all asylum seekers even those who could add to our prosperity.
4. We are one of the highest taxing countries in the world.
5. Australia is no longer conducive to retirement.
What is the point telling older people with sufficient super savings to keep working while at the same time there are educated young people having trouble finding work?
However, a pension stream should be the only way getting super funds back – so no lump sums.
the danger with raising the preservation age is despite the attractive tax regime of super it starts to become irrelevant. If you are dead or too old to enjoy it 0% tax rate is kind of academic. Remember too this is people’s OWN money.
It could produce exactly the opposite effect they are after ie people choose to put far less into super because accessing gets further and further away.
Perhaps doing something akin to a TRIS between 60 and 65 would be better ie an upper limit on withdrawals
What is the point of raising preservation ages? It only discourages voluntary contributions by those who think they may never live to enjoy their savings. Far better to let people draw super at any time as super pensions and apply a $1 for $1 income test against all social security benefits.
They ought to be careful. There are already alternative investments to super which have a better net rate of portfolio return than undeducted contributions.