In December 2014, David Murray’s Financial System Inquiry (FSI) recommended the government seek broad political agreement for, and enshrine in legislation, the objectives of the superannuation system and report publicly on how policy proposals are consistent with achieving these objectives in the long term.
The government agreed on this recommendation nine months after it was handed down, and opened a public consultation process in March this year.
In last night’s federal budget, the government confirmed that the objective of superannuation will be consistent with the FSI’s suggested definition: “To provide income in retirement to substitute or supplement the age pension.”
“Having this clear objective will enhance stability in the superannuation system by creating a clear framework for superannuation policy – and a way to assess whether the system is meeting its objective,” the government said.
“The objective for superannuation has been an important anchor for the development of the superannuation changes.”
However, the SMSF Association’s chief executive Andrea Slattery said that while the move to enshrine the objectives of super into legislation is positive, it should’ve been implemented prior to the Turnbull government’s budget.
“With what has unfolded […] the objectives should have been enshrined before making such significant changes to the tax treatment of super. In addition, we believe that changes to super should have been part of a broader, coherent review of the tax system, rather than singling out one form of savings for changes,” she said.
