The Financial Services Council (FSC) has issued a “hands-off” notice to government on superannuation, claiming any further taxes would be a breach of trust.
Calling superannuation a “bargain between government and working Australians”, FSC chief executive John Brogden said enforced savings could no longer be treated as a honeypot to be dipped into at will.
“Every time a new tax is threatened, confidence in the system is lost,” he told a FSC Deloitte Leadership Series lunch yesterday.
“There have been 10 substantial tax changes to superannuation since 2008. The industry has strongly supported sensible reforms to the system, but we’ve had enough.
“Today we are giving the government a deadline to rule out new taxes on super in the [May] budget by the time Parliament resumes on March 12.”
Pushed on what the FSC would do if the government ignored its ultimatum, Brogden (right) indicated the council would consider a campaign to draw public attention to its view.
He added that the numbers did not add up and that the FSC had been forced to act to prevent further erosion of superannuation.
“Despite the commitment to increase superannuation contributions from 9 per cent to 12 per cent, the government has taken more from superannuation in revenue than it has put in,” he said.
“Over the four-year budget-estimates period, the cost to revenue of increasing the superannuation guarantee from 9 to 12 per cent and the Low Income Superannuation Contribution Scheme amount to $2.4 billion.
“However, the negative impact of combined tax and other changes is $7.8 billion – that is a net reduction in concessions of $5.4 billion.”
Executive director of the newly formed SMSF Owners’ Alliance, Duncan Fairweather, said Australians needed to make decisions in a stable policy environment without the fear that their investments will be reduced in value due to constant tax changes.
“When governments run into budget problems they should not raid the retirement savings of Australians,” he said.
