Seven industry groups and associations have joined forces to submit a joint letter on the “high-level principles” the government should take into account in developing the superannuation system.
The groups include The Australian Shareholders’ Association, Australian Investors Association, Australian Chamber of Commerce and Industry, SMSF Owners’ Alliance, Independent Contractors Australia, The Melbourne SMSF Group and the Self-managed Independent Superannuation Funds Association.
In the letter, the groups argued that criticism of the current systems and its often-claimed “unfairness” has been exaggerated by various media outlets.
The groups also argued that the superannuation system should be considered as part of the overall retirement savings and incomes system. This should include benefits such as the age pension and Commonwealth Seniors Health Care Card.
“Different parts of the retirement income system have different objectives. The age pension provides a safety net to reduce poverty. Compulsory superannuation savings prevent over-reliance on the age pension from people with private resources and address behavioural biases that lead people to under-save,” the letter stated. “Superannuation tax concessions prevent compulsory and voluntary long-term savings from being overtaxed.”
Further, the groups argued the caps on contributions should be retained as an “economically effective” way of limiting access to superannuation tax concessions, as opposed to taxing or limiting resultant earnings or balances.
“The contribution caps should be set at a level that allows Australians to save adequately in super. Consideration should also be given to having a rolling cap or lifetime cap rather than an annual cap so as to provide more flexibility and opportunity to save for those with broken work patterns,” the letter stated.
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
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