CA ANZ calls for comprehensive review of super, retirement systems
The accounting body has called for the Productivity Commission to conduct a review into all tax settings and payment policies related to retirement.
In its pre-budget review, CA ANZ said that once an objective for super has been established, the government should consider initiating a review into all retirement related tax and transfer payment policies, including aged care subsidies.
The submission stated that for many years now, political leadership has been lacking an overarching vision for the ideal Australian retirement system.
“Instead, piecemeal changes have been made adding further complexity and inequitable or distortionary outcomes,” the accounting body stated.
“The current policy settings are complicated and are often developed without adequate consideration of flow-on impacts on market participants especially individuals.”
The submission said it is difficult for individuals to successfully navigate their way around the superannuation, social services and aged care environments without some form of professional assistance.
“A broad review of all related policy settings is urgently required,” it said.
The review could explore the merits of moving from annual contribution caps to lifetime caps, it said. It could also examine whether those under age 35 should be allowed to opt out of the Superannuation Guarantee with unpaid contributions or amounts saved in super to be used to purchase a home.
It could also look at the merits of adjusting superannuation tax concessions, particularly the maximum amount an individual may have in an account, the transfer balance cap system and the tax-free status of pensioner accounts.
The review could also look at reforms to the funding of aged care and determine how superannuation tax concessions, aged care assistance and aged pension laws and administration can be adjusted to work harmoniously together, CA ANZ said.
“The Productivity Commission should be asked to commence work on this project as soon as possible with a view to implementing any changes after the next election,” it said.
“We also suggest that the Australian Law Reform Commission should be tasked with reviewing the superannuation laws in a similar way to its current Financial Services Legislation Inquiry.”
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 also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.