The Institute of Public Accountants (IPA) has called on the Turnbull government to scrap some of the proposed changes to the superannuation system handed down in the 2016 federal budget.
Of greatest concern to the accounting body are the retrospective elements of the proposed modifications.
“Successive governments have encouraged citizens to provide for their own retirement, but retrospective policy changes have made many people feel anxious,” IPA chief executive Andrew Conway said.
“The lifetime cap of $500,000 on non-concessional contributions backdated to 1 July 2007 and the cap of $1.6 million on pension-phase balances have significantly shifted the goalposts.”
Conway noted the government could not use the argument that the changes only affected a small percentage of the population to justify backdating them in that fashion.
“The impact on people’s long-term financial savings to fund 30 years of retirement defeats the purpose of what superannuation was meant to address,” he said.
Further, he called for superannuation policy to be taken out of the yearly budgetary cycle.
“Once the mandated purpose for superannuation is determined and agreed upon, the government should then look towards making changes for the long term instead of using superannuation to plug a hole in the budget deficit,” he said.
“The IPA continues to urge the government to address structural problems with the budget through holistic tax reform.”
The government’s overall review of its retirement incomes policy should also take into account wealth-creation strategies used to fund retirement outside of superannuation, he added.