Government scuttles Senate super suggestions
Using superannuation to defray health care costs is just one suggestion dismissed by the Government, in an almost total rejection of the Senate Select Committee on Superannuation’s report on the adequacy of retirement incomes policies.
The Government, which released its response to the committee’s 2002 report late last week, said its private health care rebates were a better way to cover health costs.
“The nature of health expenditure is such that the risk needs to be shared across a broader group in the community through private health insurance and universal insurance through Medicare,” the Government response said.
“Such risk-sharing is better achieved by policies that encourage a high proportion of the population to have insurance cover than by policies that force everyone to save enough to cover an expense that may only eventuate for some people.”
The Government also rejected the committee’s call for the phasing out of the 15 per cent superannuation contributions tax; the reduction of maximum tax-deductible contribution limits; the shifting of super surcharge administration from super funds to the Australian Tax Office; and more generous tax rules for those who take their super as a lump sum.
The former chair of the Senate committee, Liberal Senator John Watson, told Parliament the refusal to integrate health care costs with the super system was the “most disappointing” part of the Government’s response.
The Government also gave short shrift to the committee’s calls for an alternative, tax-preferred system to help people save for health, home deposit and education costs.
It pointed to existing assistance for medium- to long-term saving such as the capital gains tax exemption for the family home, and the refundability of imputation credits, to justify its decision.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
