The ongoing controversy around the taxation of Australian superannuation was damaging public confidence in the system, despite current operations working well, according to the SMSF Association (SMSFA).
Further, suggestions super needed a large overhaul were counterproductive, SMSFA chief executive Andrea Slattery said.
“In the current debate about how superannuation should be taxed, it’s important to remind ourselves that the overall system is working reasonably well and achieving its primary goal as it matures – helping people to build retirement savings to become more self-sufficient in retirement to reduce reliance on the age pension,” Slattery said today.
“Compulsory superannuation helps working Australians save for retirement.
“Voluntary contributions are supported by tax incentives to encourage people to sacrifice their income today for savings that can be used in retirement.
“At the same time, the system is growing Australian retirement savings, with the Deloitte ‘Dynamics of the Australian Superannuation System Report’ showing a healthy system that is estimated to have $9.5 trillion in funds under management by 2035.”
According to the 2015 Mercer Global Pension Index, Australia’s super system was ranked third best in the world.
“While the association is not saying the current shape of our system is perfect, it is important that we have an orderly process in making any changes,” Slattery said.
“The government’s tax white paper process is the right way to address whether any changes to the superannuation tax are required and that debate should be had in a measured fashion.
“The current ongoing speculation about what changes may be made to superannuation is hurting people’s confidence in the system.”
The SMSFA had heard of consumers who did not want to commit their savings to super due to the constant threat of legislative change, she said.
“While we are always open to discussion about how the super system works, it is important not to lose sight of what has been achieved to date to assist people in building an adequate amount to be self-sufficient in retirement,” she said.
“In addition, it is essential that there is bipartisan support for the objectives of the super system so savers can be reassured about the long-term stability of the system.
“It’s also important that the government commits to a rethink about how to cost super tax incentives – we believe it’s almost impossible to have a sensible policy discussion when we do not have a clear picture on how the super tax incentives benefit government over the long term.”
