Retirement
EY tips big changes for superannuation
EY believes that despite big-ticket tax items like GST effectively being removed from the reform agenda, superannuation members should brace themselves for significant changes in the upcoming federal budget.
EY tips big changes for superannuation
EY believes that despite big-ticket tax items like GST effectively being removed from the reform agenda, superannuation members should brace themselves for significant changes in the upcoming federal budget.
While items like a GST hike have been effectively shelved, EY Australia’s superannuation leader Maree Pallisco said that “unfortunately” superannuation tax concessions appear in the government’s firing line.
“From what we understand, the government is looking for anywhere between two billion to six billion dollars from the superannuation industry, and there is no other way to do it unfortunately,” she said.
Ms Pallisco said while she’s unsure exactly what will be on the chopping block, she suggests high-income earners will be a prime target.
Brad Eppingstall, director at RSM Australia, also believes that tax concessions on contributions are set to be limited by the government.
“If you look at what has been ruled out – superannuation is one of the things that hadn’t been ruled out yet,” Mr Eppingstall said.
“This year, super is going to be a big issue,” he added.
He cited a recent Grattan Institute report, which suggests that wealthy people who use superannuation funds to reduce their tax rates should be stopped by limiting the amount of pre-tax income they can get concessions on, and ensuring earnings in retirement are taxed.
“Currently, people earning less than $300,000 per annum pay 15 per cent tax on their pre-tax compulsory contributions, while those earning more than $300,000 per annum pay 30 per cent tax. This has let the wealthy use superannuation to minimise tax, rather than to save specifically for retirement,” he said.
Mr Eppingstall also believes transition to retirement pensions are set to be dropped, given the potential multi-billion-dollar budget saving.
Federal Treasurer Scott Morrison has been foreboding significant changes to superannuation for some time now. Recently, he said “hard decisions” lie ahead for the government, as it evaluates the purpose and effectiveness of super tax concessions.
“It’s great that people are saving for their own retirement. They do it in super and many other forms. But I believe they raise questions about the purpose of the concessions […]; certainly they boost retirement incomes to the extent that their absence would result in lower balances, arguably. However, what is less clear is where the concessions for high-income earners increase savings behaviour or relieve pressure on the age pension,” Mr Morrison said.
RELATED ARTICLES
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
Superannuation
APRA’s performance test is doing its job — but now it risks doing the wrong job well
Australia’s superannuation performance test has flushed out chronic underperformance and catalysed consolidation. But its latest results have reignited a bigger question: can a single, ...Read more
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Recalibrated super performance test aims to enhance accountability and investment opportunities
In a move that signals a shift rather than a cessation, Australia's government has announced a targeted review of the superannuation performance test. This recalibration, prompted by the latest ...Read more
Superannuation
Super performance test faces a fork balancing member value productive investment and regulatory trust
APRA’s latest superannuation performance test results have reignited a high‑stakes debate: does the test optimise member value or unintentionally curb long‑term investment in housing, infrastructure ...Read more
Superannuation
Aware Super unveils innovative digital tool to boost retirees' financial confidence
Aware Super has unveiled a groundbreaking digital advice tool, Retirement Manager, designed to empower retirees by addressing their most pressing financial concerns. Developed in collaboration with ...Read more
Superannuation
APRA's super shake-up: Balancing accountability and innovation in the next round
Australia’s performance test has forced long-overdue transparency in super and accelerated consolidation. But as the regime broadens, its blunt edges are colliding with investment complexity, ESG ...Read more
Superannuation
APRA’s performance test is doing its job — but now it risks doing the wrong job well
Australia’s superannuation performance test has flushed out chronic underperformance and catalysed consolidation. But its latest results have reignited a bigger question: can a single, ...Read more
