The Association of Superannuation Funds of Australia (ASFA) has said that while a recent opposition announcement is valuable to the debate on super, any changes should be considered as part of the broader taxation framework.
In the announcement last week, federal opposition leader Bill Shorten said the Labor party intends to tax earnings in retirement at 15 per cent for those earning more than $75,000 and reduce the threshold of the high-income super charge to $250,000 from $300,000.
ASFA chief executive Pauline Vamos said any proposal needs to be assessed against the principles of adequacy of retirement income, equity, simplicity and fiscal sustainability.
“It is also important any changes maintain confidence in the system,” Ms Vamos said. “It is important that the community be brought on board to support any changes to the superannuation and taxation systems.”
Ms Vamos said this is why ASFA has been contributing to the national debate on tax reform, suggesting that tax concessions be reduced for those on very high superannuation balances, that is, those above $2.5 million.
“Those with very high balances benefit from the low earnings tax in accumulation and no tax in retirement,” she said.
“However those on high incomes do not necessarily have high balances – particularly women – and are playing catch up.”
Just because an individual has a high income, said Ms Vamos, does not automatically mean they have enough in super.
"ASFA will consider this proposal in detail and we will continue to put facts and figures on the table so that we can have an informed conversation about superannuation tax issues, as a starting point for open discussions about the retirement incomes framework overall,” she said.
“We think superannuation is beyond politics; it is fundamental to our way of life and any changes arising from the national conversation should be bipartisan.”
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