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Superannuation

Minimal super changes welcomed

Superannuation changes

The superannuation sector has welcomed the absence of changes to the mechanics of the super system in this year’s federal budget.

The absence of wide-ranging changes to the underlying workings of the superannuation system in this year’s jobs and development-focused federal budget has been welcomed by the sector.

Colonial First State technical services manager Craig Day said the budget fulfilled a promise by Prime Minister Scott Morrison at the last federal election that there would be no changes to superannuation taxes.

“There was not much announced for superannuation and very little for SMSFs,” Day told selfmanagedsuper, adding the main change in regards to super was improving its portability across jobs under the Your Future, Your Super reforms.

“When changes had been made to superannuation in the past they have undermined confidence in the system and in the current environment this budget gives certainty about what super will be.

“What we have seen is what was foreshadowed in the lead-up to the budget and it was always going to be about jobs and economic recovery.”

BT Financial Group head of financial literacy and advocacy Bryan Ashenden said the budget was “quieter” in regards to expectations around increasing the superannuation guarantee contribution rate and further extensions to the early release scheme, of which no mention was made.

“It is absolutely refreshing to see no changes being made this year and during these times to gain some stability,” Ashenden said.

He pointed out this would likely continue to be the case as the government had already pushed back the introduction of the retirement income covenant to July 2022 and had still to release the final report of the Retirement Income Review.

“The Treasurer still has a 650-page report in front of him and is unlikely to tinker with superannuation, and if there are any changes, they will be made as a totality,” he said.

“For the next 18 months the government is likely to consult on possible changes, but the next level of reforms will more than likely take place in mid-2022 and this budget indicates that will be the case.”

The SMSF Association also noted the lack of changes, stating it “expects advisers and trustees, in what is an extremely stressful year because of the COVID-induced recession, will welcome the lack of superannuation tax changes and SMSF measures, especially when considering the changes they have had to come to grips with in recent budgets”.

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