IGR sends strong message about need for super concessions

The 2015 Intergenerational Report (IGR) should give any government ³serious food for thought² about reducing tax concessions for superannuation, says Olivia Long, CEO of the SMSF administrator platform Xpress Super and SuperGuardian.

– What this report highlights is that with an aging population, the importance of people generating income streams to fund their retirement by building bigger nest eggs in the accumulation phase has become more critical than ever.

– The great news is that we will live, on average, longer and healthier lives. What we need to ensure is that we have a superannuation system that is increasingly able to allow people to be self-reliant in retirement.

– What this requires is a bipartisan approach across the political divide so that we can get the right policy settings and, as far as possible, remove superannuation from the political cycle.

– There are encouraging straws in the wind that both the major sides of politics appreciate this; I just hope the bipartisan answer is not to cut the tax concessions.²

Long says a close look at the numbers in the IGR reveals their message is quite unambiguous.

By 2054-55 it predicts there will seven million Australians aged 65 to 84. This compares with about 3.1 million today.

With regards to life expectancy at birth, the IGR is predicting an increase from 91.5 years in 2015 to 95.1 years in 2055 for males, and from 93.6 years in 2015 to 96.6 years for females.

Obviously, in one sense, this is a good news story. But it does mean that unless we get the right policy framework then future governments will face fiscal constraints, the inevitable result of an aging population supported by fewer people in the workplace.

“Quite clearly we cannot afford to wait 40 years to tackle an issue that is one our doorstep now,” she says.