Business News

Alternative uses will destroy purpose of super

The SMSF Association has slammed proposals to open up superannuation to a variety of uses, warning such a move ran the risk of destroying the primary objective of the compulsory super scheme.

SMSF Association chief executive Andrea Slattery said there was an urgent need for superannuation stakeholders to reaffirm their commitment to a super system aimed at providing people with income for a secure and dignified retirement.

“Superannuation was established to allow people to be self-sufficient in retirement and not as a cure-all for every public policy issue that arises,” Slattery said today.

“The Financial System Inquiry (FSI) was extremely cognisant of the need to reaffirm this primary objective for super when it called for ‘broad political agreement for, and enshrine in legislation, the objectives of the super system and report publicly on how proposals are consistent with achieving these objectives over the long term’.

“The association’s patron, Sir Anthony Mason, made a similar point at our national conference when he said: ‘Confidence [in superannuation] rests on the stability of assumptions on which the present system is based. Confidence is at risk of being shaken when assumptions are disturbed by changes to the system.’”

Slattery said both the FSI and Mason had valid points.

“Continual speculation about how super can be used can undermine the stability of the system and reduce people’s confidence in making long-term saving decisions,” she said.

In addition, the debate over the different uses for superannuation highlighted the importance of bipartisan support for the country’s retirement income goal for super, she said.

“There have been announcements at our recent conference emanating from both major political parties suggesting such a bipartisan approach could become a reality, and the association is dedicated to achieving this outcome,” she said.

“As illustrated in the recent “Intergenerational Report”, super must play a large role in alleviating future government costs on age income support, health and aged-care spending.

“This supports the need to maintain super’s focus on providing retirement incomes.”

Treasurer Joe Hockey earlier this month sparked debate about the use of superannuation by suggesting first home buyers should be able to use their super savings for a deposit.

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