Big changes to hit super today, tips big four firm
One big four firm has outlined the parts of superannuation that are likely to be reviewed in tonight’s federal budget, as Treasurer Scott Morrison confirms that superannuation tax concessions will be a prime target.
After months of speculation that superannuation tax breaks would be cut in this year’s federal budget, Mr Morrison confirmed earlier this week that the government will “better target” the tax concessions in superannuation.
"I don't think there's any great secret about that, the details of those things we'll deal with on Tuesday night,” Mr Morrison said, according to ABC reports.
Liz Westover, PwC’s director of private clients, expressed strong opposition to the contribution caps being reduced.
“What they could do, and what we would be supporting, is a look at lifetime caps [and] some sort of roll forward provisions,” she told SMSF Adviser.
In line with broader industry consensus, Ms Westover suggested transition to retirement income streams (TRIS) are set for the chopping block.
“I think TRIS are a big risk. I can’t see how the government could maintain them in their current form. I would love them to maintain TRIS for genuine transition to retirement purposes. The policy intent is good – to genuinely assist people […] to ease into retirement – but they didn’t put the triggers in place,” she said.
“As a tax tool, it’s not really meeting the policy objectives. It’s not always used for what it was intended. Most people are gearing up to see them abolished, certainly as a tax strategy anyway,” she said.
Overall, Ms Westover said she hopes the government appropriately considers potential “unintended consequences” of budget measures.
“Also, if it’s really about fairness and equity and helping the budget bottom line, you want to make sure the costs associated with implementation don’t outweigh any benefits of the changes,” she said.
Another big four firm, EY, also recently told SMSF Adviser it’s unlikely that high-income earners will escape the budget unscathed.
“From what we understand, the government is looking for anywhere between $2 billion to $6 billion from the superannuation industry, and there is no other way to do it unfortunately,” said EY Australia’s superannuation leader Maree Pallisco.