Industry facing ‘superannuation tax conundrum’
To its detriment, the superannuation industry is sending the government strongly conflicted views on whether tax concessions within super should change or remain the same, says Chartered Accountants Australia and New Zealand (CAANZ).
CAANZ superannuation leader Liz Westover told SMSF Adviser there is work that needs to be done in regards to the taxation of superannuation, but added that it is a “conundrum for the industry at the moment”.
“On the one hand, we’re telling government at the moment, don’t tinker with superannuation [because] the constant changes are undermining confidence in the system; on the other, we’re saying, well, actually, we might need all these changes around taxation and superannuation,” Ms Westover said.
She said that while it was certainly worth looking at changes to tax and superannuation, the industry first needed to establish a range of objectives for superannuation, or risk undermining public confidence in the super system.
“First and foremost we need to establish a set of objectives, not only for super but [for] our retirement income system and then we can assess any potential changes against those objectives,” she said.
If one of the objectives established is to provide an adequate standard of living in retirement, Ms Westover said, it may then be appropriate to look at some of the proposals put forward, such as reducing the concessions for assets over $2.5 million within a superannuation fund.
“A balance of $2.5 million or $3 million may be appropriate for an adequate retirement so those people no longer need the support of government through tax concessions to save further – they should certainly have the option to save further within superannuation, but they lose those tax concessions,” she said.
Ms Westover added that the industry needs to “assess whether tax-free [superannuation income] over 60 is still reasonable”.
“It’s really [about] sitting down and doing the proper analysis of the implications of where those tax concessions actually lie and lining them up against each other, and what’s ultimately going to meet the objectives that we set down for our retirement income system,” she said.
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.