The SMSF Association is concerned about the Labor Party’s opposition to proposed changes to the superannuation system that will usher in much-needed flexibility and remove layers of complexity and red-tape from the system.
The SMSF Association Managing Director/CEO Andrea Slattery was responding today to Labor’s decision not to support the Budget measures to carry forward unused concessional contribution caps, remove the “work test” for people aged 65 to 74, and abolish the “10 per cent rule” for personal deductible superannuation contributions.
“The SMSF Association believes the Labor Party’s suggested policy to oppose these Budget measures is a shift in the wrong direction for our superannuation system.
“We have argued strongly for the carry forward of unused concessional contribution cap space as an important policy move to allow people with broken work patterns and volatile incomes, such as women and small businesses, to make catch-up contributions to boost their retirement savings.
“These three measures announced in the 2016 Budget that Labor now opposes are welcome reforms to the superannuation system, reducing red tape and complexity and increasing the flexibility of the system for people making contributions to build their savings for their retirement.”
Slattery says the Association acknowledged the need for the superannuation system to be sustainable and equitable into the future.
“But notions of sustainability and equity have to be balanced against allowing people to have adequate opportunities to save for a secure and dignified retirement – surely the key consideration of any superannuation policy.”
“This emphasises the need for the objective of superannuation to be legislated with adequate retirement savings being a key focus when setting the system’s long-term goals.”
She says the Labor Party’s proposal to lower the Division 293 tax threshold to $200,000 from the Government’s proposed $250,000 threshold in order to fund change to the non-concessional contribution lifetime cap deserves further consideration and the Association will take time to consider the impact of this proposed policy.
She adds that the Budget proposal to lower the concessional contribution caps to $25,000 for everyone remains the Association’s “biggest concern”.
“This policy measure, above all else, will have an enormous impact on people, especially those aged 50 and over, who want to be self-sufficient in retirement.
“We would encourage all sides of politics to further consider reinstating a higher concessional cap for people aged 50 and over to allow them to achieve the goal of self-sufficiency in retirement.”
