The financial services industry has welcomed the fact the 2022 federal budget contained no major changes to superannuation, while at the same time applauding the government’s attempt to resolve some contemporary issues.
Measures handed down in the 2022 budget included confirmation the minimum pension reduction will extend to the 2023 financial year, a one-off $250 payment to apply to eligible self-funded retirees to provide them with cost-of-living relief and a reduction in the minimum home deposit for single parents and first-home buyers.
Addressing the issue of who an eligible self-funded retiree might be, SuperConcepts SMSF technical and strategic solutions executive manager Phil La Greca said they were likely to be those individuals who do not qualify for a pension due to the means test, but their income is low enough to qualify for the Commonwealth Seniors Health Card.
“It’s a tax-free benefit and additional money to help cover costs and that’s what some people are looking for at the moment,” La Greca told selfmanagedsuper.
SMSF Association chief executive John Maroney applauded the government’s decision to resist making further changes to the country’s retirement savings system.
“This budget includes stability of superannuation tax and contribution rules compared with the significant and important reforms to superannuation in last year’s budget. This simple fact that there were no wholesale changes to the superannuation system is gratifying for an industry that needs a period of stability,” Maroney said.
Financial Services Council (FSC) chief executive Blake Briggs welcomed the move to support individuals in relation to living costs, which had been additionally helped by the one-year extension to the 50 per cent reduction to the minimum pension drawdown requirements.
“Tonight’s budget contains important support for Australian retirees who are facing challenging increases in the cost of living,” Briggs said.
“Retirees will welcome the extended reduction in the minimum superannuation drawdown requirements, as well as the targeted cost-of-living support for Australian pensioners and self-funded retirees.”
He also welcomed the fact no major superannuation measures had been announced.
“Superannuation consumers are facing a challenging economic environment and need certainty and stability in their superannuation savings. The FSC welcomes the government’s commitment to make no adverse superannuation tax changes in the next term of parliament.”
Association of Superannuation Funds of Australia (ASFA) chief executive Martin Fahy concurred the lack of changes to the retirement saving system is a positive development.
“There are no major changes to superannuation in tonight’s budget and the stabilisation of policy settings will contribute to better long-term retirement outcomes and enable consumers to plan for retirement with confidence,” Fahy noted.
“The stability in superannuation policy settings in tonight’s budget is recognition that the superannuation system is effective, sound and sustainable. It is well placed to deal with economic uncertainty and the challenge of an ageing society.”
According to Financial Planning Association chief executive Sarah Abood, financial advisers can expect to benefit from the lack of focus on the industry in the budget after a period of continuous policy change.
“There are no major changes for financial planners or their clients, which means planners can continue to focus on helping their clients and growing their businesses. It is an opportunity for financial planners to catch their breath after years of change,” Abood said.
“The tax offsets for small businesses, supporting digital transformation and upskilling of staff, will be very useful for financial planning practices – many of which are small businesses themselves.”
