Super must move to sustainable basis, says Minister Jones
Minister Jones has looked to assure the SMSF sector that Labor is “not singling the sector out for attack” as the government hints at introducing a $3 million super cap.
In a presentation at the SMSF National Association Conference, Minister for Financial Services Stephen Jones said following the release of the proposed objective for superannuation, the government continues to work towards legislating an objective of superannuation.
Mr Jones said while Australian superannuation has been a great success story, “no public policy can or should be set and forget”.
“We are not trying to revolutionise the system, but there are questions to be asked,” he continued.
Discussions around taxation and superannuation tax concessions, he said, need to be made in the broader context of how the government supports Australians in retirement through tax concessions and the cost of the aged pension.
“With the Budget under increased pressure to meet the costs of essential services like health age, aged care and the NDIS, we need to consider reforms that put all elements on a more sustainable basis,” explained Mr Jones.
“To be clear, I am not singling out the self-managed sector for attack. But it is timely to have a conversation about what a dignified retirement means in the context of a sustainable retirement system.”
Mr Jones stated that many people will be able to have a dignified retirement well into the future with a balance that is significantly lower than $100 million.
“There will be a time and a place to consider how we might sensibly transition so that it minimises unnecessary disruption.”
The government is inviting the country to have a national conversation about the objective of superannuation.
“In this conversation, there will be some things that stick out. Some things clearly don’t align with the objective of delivering retirement incomes. But this isn’t lip service and it’s certainly not the start of a Canberra culture war,” he stated.
“It’s about uniting to agree on a true north for superannuation. Because after 30 years, it’s time for consensus in superannuation policy.”
In a radio interview on Wednesday, Treasurer Jim Chalmers said while Labor still thinks there should be tax concessions for people to save for their retirement, those tax concessions need to be “affordable and sustainable”.
Mr Chalmers said there is an opportunity for the government to consider what changes could be made to super – whether it’s the size of somebody’s balances or other minor changes.
“Superannuation is for people saving for a decent retirement and there should be tax advantages to doing that. But what we have to accept at the same time is the average super balance is about $150,000. Less than one per cent of people have got more than $3 million in their super. The average amount that people have when they've got more than $3 million is $5.8 million.”
“We should be up for a conversation about whether paying a lot of taxpayer money in concessions for that group is the best use of that money.”