The partner of a mid-tier accounting firm said it is unclear how the Labor Party’s expressed intention to have the pool of retirement savings play a more significant role in the country’s economy will be implemented.
HLB Mann Judd Sydney wealth manager partner Michael Hutton acknowledged mandating a prescribed allocation to a particular asset class, such as infrastructure, to achieve this aim would be extremely challenging.
“I think directives are difficult, but I think that’s possibly the only way it’s going to happen too, but I don’t know if they’ll go down that path,” Hutton said at a media briefing held in Sydney today.
Fellow HLB Mann Judd Sydney partner Jonathan Philpot said a directive to ensure superannuation savings are channelled in a particular direction might be a viable solution if members were not provided with the ability to choose their investment options as they are currently.
Hutton also pointed out the potential alternative to a prescribed instruction, being providing an incentive for superannuation funds to invest in particular asset classes, would not necessarily work either, particularly if it involves the taxation applied to retirement savings.
“The super fund has got a big tax break anyway. They pay 15 per cent tax less imputation credits and no tax if they’re in pension mode, so I think tax incentives are a difficult one [beyond providing] tax incentives to get money into super,” he noted.
According to Hutton, if the measure does go through, it is likely to be applied to larger pubic offer super funds only.
“Why would they try and corral 600,000 SMSFs [with this policy]?” he said.
Both Jim Chalmers, while opposition treasury spokesman, and Stephen Jones, while opposition financial services spokesman, declared a Labor government would advocate to have the $3.5 trillion in superannuation play a larger role in areas such as infrastructure in the economy.