SMSFA warns of long-term risk with super speculation
As the government encourages Australians to broaden their views on superannuation, the SMSF Association has warned that using superannuation as a “cure-all” for public policy issues threatens to undermine the stability of the super system.
SMSFA chief executive Andrea Slattery said the main goal of super is to provide people with income for a secure and dignified retirement and that everyone involved in superannuation should stop looking for other ways to use the $1.93 trillion pool of savings.
“Superannuation was established to allow people to be self-sufficient in retirement and not as a cure-all for every public policy issue that arises,” said Ms Slattery.
“The Financial System Inquiry was extremely cognisant of the need to re-affirm this primary objective for superannuation when it called for ‘broad political agreement for, and to enshrine in legislation, the objectives of the superannuation system and report publicly on how policy proposals are consistent with achieving these objectives over the long term’.”
She also referred to comments made by the SMSF Association’s patron, Sir Anthony Mason, that confidence in superannuation “rests on the stability of assumptions on which the present system is based”.
“Confidence is at risk of being shaken when assumptions are disturbed by changes to the system,” he said.
Ms Slattery said both the FSI and Mr Mason make valid points.
“Continual speculation about how superannuation can be used can undermine the stability of the system and reduce people’s confidence in making long-term savings decisions,” she said.
Recent debates over the different uses for superannuation, Ms Slattery said, have highlighted the importance of bipartisan support for super as a retirement income goal.
There have been announcements from both major political parties suggesting a bipartisan approach could become a reality, she added.
“As illustrated in the recent Intergenerational Report, superannuation must play a large role in alleviating future government costs on age income support, health and aged care spending,” said Ms Slattery.
“This supports the need to maintain superannuation’s focus on providing retirement incomes.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.