Cast your minds back a few months ago to when uncertainty stalked the superannuation industry. There was never-ending speculation emanating from Canberra that the tax breaks that superannuation (rightly) enjoys would be cut...
SMSFs, in particular, appeared to be in the firing line as the government looked at a Budget deficit that seemed to be growing by the day, and saw the $1.5 trillion superannuation honey pot as an obvious fiscal solution.
But the 5 April statement by the then treasury and superannuation ministers, Wayne Swan and Bill Shorten, put an end to much of this speculation; superannuation as a short-term revenue fix was largely off the agenda. An audible sigh of relief from SMSF trustees could be heard from Darwin to Hobart.
Three months later, the government has added the icing to the cake with Treasurer Chris Bowen’s announcement yesterday to commit to no major changes to superannuation tax policy for five years. When coupled with the Opposition’s pledge not to implement any “detrimental changes” to superannuation, then we have the nearest thing to a bipartisan – to say nothing of a positive – approach to superannuation that we have seen in years.
So what does this effectively mean? The increase in the Superannuation Guarantee to 12 per cent super will continue apace (the first increase began on 1 July) and the higher concessional caps will remain in place that have allowed people aged 60 and older to increase to $35,000 from 1 July and for anyone 50 and older from 1 July 2014.
There was another interesting development contained in Mr Bowen’s speech. If re-elected, the government plans to bring forward legislation to establish the Super Council to ensure any future changes to superannuation are consistent with an agreed Charter of Superannuation Adequacy and Sustainability.
At first glance, this initiative might not seem all that relevant. But I would beg to differ. What superannuation needs, more than anything else, is to be taken as far as possible out of day-to-day politics. We want a bipartisan approach that makes it as politically sacrosanct as the family home.
To this end, having a Super Council comprised of eminent industry figures making apolitical recommendations to the government of the day is a step in the right direction. Although governments can always reject the recommendations, it is that much harder to do when they come from a respected body that the government has appointed.
As we all know, in the run-up to an election campaign, politicians’ promises are a bit like confetti – they get thrown everywhere. But these promises by the government and the Opposition also happen to be good policy in terms of ensuring people can be self-sufficient in retirement.
As such it’s beholden on all of us to keep them to their word.
Olivia Long is the chief executive officer for SuperGuardian, Xpress Super and PortfolioGuardian.
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