Protecting the growing self-man­aged super funds sector simply makes sound economic and social sense. It encourages Australians who have the desire and ability to fund their own retirement to not become a drain on the public purse.  That’s one of the key messages in the submission of the Self-Managed Super Funds Professionals’ Association of Australia (SPAA) to the Cooper Com­mittee, which is currently undertaking a review of the governance, efficiency, structure and operation of Australia’s superannuation system.  For a whole host of reasons, super should be encouraged, rather than discouraged by a growing raft of regula­tory changes that can only be seen as major disincentives for Australians to even bother trying to fund their own retirement.

Raising contribution caps to – at least – the pre-Budget levels and remov­ing other artificial barriers, such as work tests for those over the age of 65, would allow for more appropriate contribu­tions throughout a member’s life cycle. This would go some way to redressing the squeeze that currently appears to be crushing voluntary contributions into the superannuation sector.  Prime Minister Rudd has em­phasised superannuation as the main savings vehicle for Australians in their retirement. All efforts should encourage savings via tax incentives to assist Aus­tralians to create a positive opportunity to drive their own retirement. This will relieve pressure on the age pension and on ancillary services, such as health care.

Given that Australian age pension­ers are living on one of the lowest levels of support in the OECD world, why wouldn’t we as a country be doing every­thing we can to encourage Australians, where possible, to stay above the poverty line?  As shown by the significant growth of the SMSF sector, it’s clear that many Australians are disenchanted with the prospect of being solely reliant on Gov­ernment handouts in their old age, and are increasingly prepared to make the commitment to a self-funded future. So why are things so complex and restrictive for them?  The structure of the superannuation industry needs flexibility to recognise the rights of individuals to choose their desired level of participation. It must allow them to manage their retirement savings effectively.  Participation and investment flexibil­ity are powerful incentives to contribute to super, as evidenced by the growth in the SMSF sector and voluntary contri­butions in recent years.

Confidence in the superannua­tion system is at an all-time low. The Government should be encouraged to re-establish a high level of confidence in the system; otherwise Australians will inevitably find “other” ways of investing – be that in overseas investment, negative gearing, property or the like.  Any policy decision must take into account empirical evidence.  All attempts must be made to understand the governance, efficiency, structure and operation of all sectors within the Australian superannuation system. This is even more critical in the SMSF sector where many decisions have been made according to anecdotal information. This has resulted in serious anomalies and inequities within the SMSF sector compared to the other four sectors of superannuation.

SPAA is committed to the ongoing development of professional specialist advice for those actively providing servic­es in the superannuation industry. SPAA seeks to increase competence through knowledge and education, increasing levels of compliance and reducing costs through economies of scale. An example in the SMSF sector is having specialist SMSF auditors registered and manda­tory accreditation programs for all other SMSF service providers.  Australia currently has a strong, robust and growing SMSF sector – it is recognised as one of the best in the world. We need to support this. The intelligent removal of complexities and conflicts from the system will allow us to continue being the world leader. Australians should have the right incen­tives to fund their own retirement and governments should appreciate the role of self-funded retirees in lessening the burden on the public purse.

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