The head of a global asset management firm has refuted the federal government’s belief superannuation is a great source of revenue and questioned its use of this notion as the justification for the constant changes being made to the retirement savings system.
“I challenge whether [the super changes] are [a good revenue-raising measure],” UBS Asset Management Australasia head Bryce Doherty said at the presentation of the 2017 Financial Services Council (FSC)/UBS Asset Management “State of the Industry” report in Sydney.
“I think that the analysis on those changes, with all due respect, is always done in quite a vacuum.”
Doherty pointed out behavioural factors came into play significantly when changes to the system were made, but little consideration was being given to them. He drew on his own experience with the type of services advisers are currently providing as evidence.
“I know from the advisers we deal with here in Australia that they’re doing more family trusts than they’ve ever done before,” he said.
“Every year we seem to hear ‘oh we’ll just do this, this and this and that’s going to raise an extra ‘X’ $100 million’, but that doesn’t take into account people’s behaviour.
“As we said in the report, contributions went down this year. That doesn’t mean people made less money particularly, they’ve just gone and found other places to put it.”
He stressed the government needed to shift its attitude toward superannuation and end the belief changes to the system represented true tax reform.
“Seemingly everyone will agree we need to have tax reform and that conversation begins and finishes with how can we do more to tax super,” he said.
“To us that doesn’t make any sense at all. Super really is there to ensure that people can have a secure retirement.”
FSC chief executive Sally Loane cited all of those reasons for its repeated calls to take superannuation out of the budget cycle.
“We keep encouraging both parties to tie superannuation policy to that five-year intergenerational report, which shows basically where Australia’s heading for the next five years demographically,” Loane said.
“That would make sense. That would take it out of the budget cycle.
“All we can do is encourage them to do that. As the figures show, whenever there is tinkering or changes to superannuation, people get nervous, take their money out and put it elsewhere.
“They’ve got the money, they’re just finding other vehicles.”
