Retirement
Beware the spin and hot air in superannuation election promises
Plenty of superannuation promises are being thrown around by both sides of politics, but if history is any guide, the biggest promise of all is unlikely to be kept.
Beware the spin and hot air in superannuation election promises
Plenty of superannuation promises are being thrown around by both sides of politics, but if history is any guide, the biggest promise of all is unlikely to be kept.
Both sides of government have a history of promising they will not make adverse changes to superannuation. However, there’s a fundamental flaw in this track record: the purpose of superannuation isn’t enshrined in law, so each party’s definition of “adverse” is different.
In 2014, a major inquiry into financial services recommended the definition of super be legislated, and the Turnbull government introduced a bill to that effect. It got stuck in the Senate, and hasn’t seen the light of day since 2016.
So, here we are again. The federal election is a month away. Both sides of government are saying they’ll make superannuation better for Australian investors, but without bipartisan support, this simply means Australians aren’t protected from confusion and unpredictability in the superannuation environment.
Already, the promises of the major parties don’t stack up. The federal election is now a month away, and the major parties are again promising that, this time, Australians can expect a more stable superannuation environment. However, there is a line-up of changes waiting in the wings.
The Liberal Party
The Morrison government has issued a guarantee that his party will not implement new taxes on superannuation. At this stage, there is no time frame for how long this guarantee will last in the Liberal Party’s statement.
It’s important to note that when Scott Morrison was federal treasurer in 2016, he introduced the biggest round of changes to superannuation since the era of Howard and Costello. This includes the $1.6 million transfer balance cap. Mr Morrison also moved to introduce a lifetime cap on contributions of $500,000 for non-concessional contributions, which never eventuated.
The Morrison government will again move to have six-member self-managed superannuation funds (SMSFs) legislated, despite the proposal being removed from a bill introduced earlier this year.
The Labor Party
This week, Opposition Leader Bill Shorten said only what has been announced by the Labor Party will be in the pipeline for superannuation if he’s elected to government.
Changes to the division 293 tax threshold, at which high-income earners pay an additional 15 per cent tax on concessional contributions, would also be lowered from $250,000 to $200,000 under Labor.
Labor is also proposing lowering the non-concessional contribution caps and removing the provision for catch-up contributions.
Mr Shorten disputed claims that these measures constitute an increase in taxes.
“I do dispute it as a tax increase. I absolutely do. What happens when you give a concession to someone is that’s a tax expenditure. If I was to give you a concession on something, that is money that we take out of the tax system, which you get,” Mr Shorten said.
“That is a concession to you. And that, therefore, becomes a choice. Is it the best use of a concession to give someone a concession, preferential treatment on one aspect of superannuation? Or to invest in other parts of our nation’s priorities?”
RELATED ARTICLES
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more
Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more
Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more
Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more
Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more
Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more
Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more
Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more
