Speaking at the AFR Super and Wealth Summit on Tuesday, shadow treasurer Angus Taylor said retirement is an individual experience and there is no “one-size-fits-all” product.
“We need policy that delivers choice, informed options, and the advice and adviser network to deliver the very best outcomes in retirement. Self-managed super funds are an integral part of that choice,” Taylor said.
“Self-managed super is a proud legacy of the Howard-Costello government and it will remain critical under future Coalition governments. We cannot allow a preferential regulatory regime to apply to one sector over another.“
He added that superannuation has a “vital role to play” in supporting the aspirations of Australians and the Coalition is committed to its role in the retirement system.
“Changes to the super system should add to what super delivers in retirement, not add to what politicians can’t fund with their budgets. It shouldn’t be there to fill the holes of a government that wants to spend more money,” Taylor said.
Taylor told attendees that to ensure the SMSF sector remains robust there is a critical need to better support finance professionals working in the retirement system, particularly those working with SMSFs.
“This extends beyond financial advisers to accountants, bookkeepers, and lawyers,” he said.
“We need to support these professions, not burden them with more red tape, more costs, and more headaches dealing with government regulators.”
The growing size and role of super, Taylor said, means it is even more important that policy settings are correct and emphasised the need to focus on the “importance of good governance, clear price signals, and transparency about the use of members’ funds”.
“The IMF has warned of the risks of getting this wrong and the RBA has made this clear in its financial stability review.”
“There is no doubt the industry is shifting – with more members hitting retirement age with accumulated savings; more Australians having substantial balances in super; and the super guarantee increasing to 12 per cent – members’ expectations are changing and escalating.”
Furthermore, he added that if superannuation is to keep its social licence, its focus on members’ interests must be “relentless”.
However, he said that critical to building this social licence is remembering that while superannuation is an important part of the retirement system, it’s not the entire system.
“The Coalition’s super for housing policy is about restoring the promise of super, not dismantling it.”
“We are in a bizarre position where super advocacy bodies are supporting higher taxes on super while opposing its use for housing. Sensible people can disagree, but there is no faster way to end the social license of super than by engaging in partisan attacks, disingenuous commentary, or scare campaigns.”
Taylor said he acknowledged the work of industry association leaders who, while not supporting this policy, continued to constructively engage.
“Blake Briggs of the Financial Services Council has acknowledged the importance of the home-ownership challenge to the future of our financial system and retirement policy; Mary Delahunty of ASFA, for identifying the good work some funds are doing – such as Aussie Super – on supporting the objective of home ownership through innovative models as well.”
“A compulsory retirement system that ignores home ownership flies in the face of all evidence about the importance of home ownership to retirement outcomes.”
Its a catch 22.
How can people afford to save for a deposit if 12% of their wages goes into forced savings?
And how do the large funds get away with frittering away members funds on unions and marketing? The returns are not great after admin fees and all of the above, leaving not an awful lot in retirement after returns, which are not much better than inflation. :/
That’s what makes SMSFs so attractive.
And home ownership in retirement is essential for a dignified retirement – in my personal opinion from the experience of retired people that I know both owning and not owning a home.
We live in a massive country. I still don’t get why the Sydney basin gets 2 international airports and millions of people have to be crammed into that basin where pollution just sits for days and days for those living basically west of Sydney CBD.
Perhaps we need to spread out a bit more close to water supplies etc. We have so much room to grow.
Sydney prices are like they are because land is scarce and it is getting worse quickly. No room for cemeteries or rubbish tips in the near future, but plenty of room for a new airport.
Too many conflicting parties and too much corruption.
This is the same dumb idea that EVERY federal government proposes. More money = more supply of purchase capital = higher housing prices.
It’s not even economics 101. It’s simpler than that.
More houses = more supply = cheaper houses.
Councils are the biggest problem with all their dumb rules, multitudes of certificate requirements etc.
We have high house prices due to government policy at all three levels of government.
Increasing the supply of capital only continues the tradition of really bad government policy.
I have commented on the housing issue over and over again and no one in government seems to pick up on the obvious. We need to adopt a model that allows so called “mobile homes” as in the USA. Investors (including obviously institutional super funds) set up parks consisting of smaller lots of land, say 400m2, along with infrastructure – roads and utilities. People purchase and locate a “relocatable home” on a rented site within a park. Government needs to subsidise the infrastructure to make parks and site rent affordable. Further an income tax means tested rebate on site rental would help and make sense.
For any find of dignified retirement, on a pension, home ownership is a must, I believe. Whilst it is great that we provide pensions to help people in need, it is not an automatic right. Encouraging people into homes helps them be more self-sufficient in retirement. Self-sufficiency is surely what they end game should be for governments and those that are not capable of self-sufficency for whatever valid reason should be able to get the help that they need to live with dignity.
But how can anyone save for a home deposit when up to 12% of their wages are forced into a superannuation account as a form of forced savings? This is a huge chunk of wages and it is not something that employers should provide as they cannot put up fees to cover this for consumers to reimburse (and we already have a huge productivity issue in this country). It is just a vicious circle.
Of course, for some sides of politics, they need higher taxes in order to give handouts and keep people voting for them. Sometimes this backfires spectacularly as more people realise that this cannot be sustained.
It is also unsustainable to be expected to pay 12% into super and also save for a home. Something has to give. The stats are showing that home ownership is what is giving, as the forced savings that should be funding for retirement is squandered by the large super funds into marketing and supporting unions who then pass it on to Labor and whatever other free-for-all that they can get away with.
Same old, same old, just different means…. That is why SMSFs are so attractive, but not anymore it seems with Division 296 lurking – turning theft of life-savings into Law. Same old, same old. Just ruin what works as always.