Budget gets measured welcome from industry

The Federal Budget has received a mixed but not totally negative response from the financial planning industry, with the Investment and Financial Services Association (IFSA) critical of changes to the superannuation co-contribution regime but others suggesting things might have been worse.

While IFSA deputy chief executive John O’Shaughnessy warned that the changes to superannuation had created further uncertainty in the minds of Australian retirees, the Australian Institute of Superannuation Trustees (AIST) chose to focus on the improvements to pension arrangements.

AIST chief executive Fiona Reynolds said the changes to superannuation tax concessions and an increase in age pension payments announced were the right steps towards a more equitable and sustainable retirement system.

“The Budget contains far-reaching changes for age pensions, and more modest but challenging developments for superannuation,” Reynolds said.

“Together, these initiatives are aimed squarely at tilting the retirement incomes playing field back in favour of lower income earners.

As expected, single pensioners with little super benefit the most.”

She said during the difficult economic times currently being experienced, it was only fair that the more generous benefits enjoyed by high income earners were re-balanced against the needs of Australia’s less well-off citizens.

The Institute of Chartered Accountants in Australia welcomed what it described as the Government’s “minimal” Budget changes to the superannuation system and focus on simplifying the pension system. However, it noted that for those Australians who had planned their retirement funding based on the current concessional contribution caps, there would be a need to review those arrangements due to the changes announced in the Budget.

It said the changes might significantly impact on retirement goals and timelines.

By Mike Taylor