The federal opposition’s proposal to increase tax on superannuation income will create further uncertainty and could significantly impact people's ability to plan for retirement, says BDO Superannuation.
BDO Superannuation partner Paul Rafton said that for a vast majority of people, superannuation is the longest financial commitment they will ever make.
“For people to have confidence in superannuation it is critical that there is stability and certainty around the rules that govern it,” said Mr Rafton.
“The Opposition’s proposal to tax superannuation income above $75,000 at 15 per cent has again created significant uncertainty in an area that has already had its fair share of ambiguity in recent times.”
Mr Rafton said it is not clear at what point the tax will apply under this policy or how the system will work.
“It’s time for both sides of politics to end speculation about superannuation and come together to create a genuine plan for how we, as a nation, should fund retirement,” she said.
“We need a plan that will last us for the next 50 years and beyond, and the only way that will happen is if there is a bipartisan approach.”
As the population ages, Mr Rafton said, funding retirement will be one of the most significant challenges Australia will face, and so it is far too important to be treated as a political football.
He is also concerned about the principle of introducing taxes that discourage people from contributing to super.
“The fact is that people who have made extra contributions to their super have made sacrifices earlier in life in order to do that,” Mr Rafton said.
“By doing so, they have taken responsibility for self-funding their own retirement, thus taking pressure off our already over-burdened social welfare system.”
“Proposals like this have the potential to discourage people from contributing anything beyond their compulsory contributions,” he said.
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