The proposed changes to the superannuation system seem to favour certain objectives of the Australian retirement savings framework and not others as outlined in the first tranche of legislation covering the subject, a sector technical expert has said.
SuperConcepts SMSF technical and private wealth executive manager Graeme Colley told last week’s Super Central Bacon, Super and Eggs seminar that the federal government, when releasing the first tranche of the legislation regarding the objective of the super system, stated: “It was to provide consumption smoothing over a person’s life and that talked about fund it for a working life, so you had to work to put your money into superannuation, [and] it talked about an increase in self-reliance, so they cut down the concessional contributions caps.”
In contrast to this seemingly counterproductive action taken in light of the stated purpose above, Colley pointed out two further goals with which the proposed system changes were seemingly more in keeping.
“Alleviate fiscal pressures on the government. I think I should have that in flashing lights don’t you?” he told the seminar in Sydney.
“And then to be simple, efficient and provide safeguards, which is about minimum costs to individuals, taxpayers and the economy.
“So I think that could be in flashing lights.”
He also drew practitioners’ attention to a final item contained in the explanatory memorandum earmarked as a ‘tension’ of the proposed legislation.
“[It is the] balance of facilitating consumption over a person’s life and the need to weigh it against the fiscal pressure of government,” he said.
“So the last few things certainly seem to be dominant when they’re talking about the objectives of the superannuation system.”