Australia’s financial services sector has a clear message to the Government ahead of next week’s Federal budget. Think long and hard about any changes to tax on superannuation that will compromise its integrity as Australia’s trusted retirement savings vehicle.
According to Madeleine Mattera, National Head of Financial Services, Grant Thornton Australia, potential changes to taxing superannuation carry two inherent risks.
“Firstly, any significant changes that impose unnecessary increased compliance to superannuation funds will inevitably be passed on to Australian savers. It increases complexity and administration burdens for superfunds that should be focused on delivering good returns to Australians and may drive up administration fees when The Murray Inquiry is calling for fees to be more competitive.
“Secondly, and most importantly, we have many Australian’s that have structured their savings in a way that will see them set up to ensure long term independence in their retirement. Let’s not penalise this planning, much less compromise people’s faith in using superannuation as a retirement savings vehicle.
“Should we see any changes made to tax on superannuation next week, we strongly urge that these changes be made in consultation with the industry to ensure we preserve the integrity of the system.
“Grandfathering arrangements are imperative to any changes announced to allow sufficient transition period for those who have diligently structured their independence in retirement, without being penalised.
“We are asking the government ahead of next week’s Federal Budget announcement to consider the difference between changing the rules around what a superannuation fund is required to do and how the tax system applies to tax contributions, earnings & withdrawals. Any reform needs to consider both,” said Ms Mattera.
Source: Grant Thornton
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