The government has started to map out how it will populate its planned objective for superannuation with the recently announced policy of an additional 15 per cent tax on the earnings of super balances above $3 million fitting in with its proposed definition.
Smarter SMSF chief executive Aaron Dunn said the proposed objective put forward by the government in February stated “it is to preserve savings to deliver income for a dignified retirement, alongside government support in an equitable and sustainable way”.
“There are some important concepts here within the wording that now become very apparent as to the steps that [the] Labor [government] are going to be taking from here,” Dunn said during an online briefing today.
“One of those is the announcement around equitable and sustainable tax concessions and the introduction of the $3 million account balance threshold to apply a 15 per cent earnings rate fits the narrative of that.
“It also captures the objective’s aim that superannuation delivers similar outcomes to people in similar situations and targets those in need of it most.
“The preservation of savings is another area that we are going to see Labor focus on.
“I suspect we will see this form part of this year’s budget where they’re going to be ensuring that what occurred [with the early release of superannuation] during COVID will not happen again because they want to preserve it for a person’s retirement and not for a current-day use.
“Being able to use it for housing or for certain surgeries, these are already on Labor’s radar and they intend on tightening down on and ensuring that they cannot happen in the future.”
He said the proposed objective’s statement regarding delivering income for retirement addresses the purpose of superannuation to provide universal savings to be enjoyed in retirement and not for the minimisation of tax or for estate planning purposes.
“Again, we have this notion that you must be drawing it for retirement and not leaving it to form part of an estate benefit which then passes on to future generations,” he said.
“Whether we see something around a compulsion to start looking at retirement incomes, we need to wait and see, but we haven’t had that since 2007 where the old rules of having to start an income stream at age 65 were removed.
“You can pick out bits and pieces here and start to see the narrative that the current government is forming in putting these certain policies together.”
