Tackle super through tax reform
The Federal Government should drop certain superannuation policy changes proposed in the 2016 Budget and tackle structural budget problems through holistic tax reform, a professional account body opined.
The Institute of Public Accountants joined others in urging the Federal Government to drop certain superannuation policy changes, in particular the lifetime cap of $500,000 on non-concessional contributions backdated to 1 July, 2007, and the $1.6 million cap on pension-phase balances.
IPA chief executive officer, Andrew Conway, also urged the government in taking super out of the budgetary cycle and cease the tinkering, adding the Government should only make long-term changes once it enshrines the purpose of super.
"Justifying these changes on the basis it only impacts a small proportion of the population does not justify backdating their impact," Conway said.
"The impact on people's long-term financial savings to fund 30 years of retirement defeats the purpose of what superannuation was meant to address.
"Successive governments have encouraged citizens to provide for their own retirement but retrospective policy changes have made many people feel anxious."
Conway also suggested considering strategies outside of super to fund retirement as part of a wider review of retirement income policy.
AUTHOR
Malavika Santhebennur
Recommended for you
Adviser Ratings has revealed almost 400 advisers joined the FAR in the third quarter but, with just seven weeks to go until the education deadline, more than 1,000 could depart in the upcoming two quarters.
Pengana has appointed a senior fund manager from Tyndall Asset Management to join its Australian equities team, who departs after 18 years.
Advisers are underestimating how much time they spend on non-advice work, creating inefficiencies within their practice which has a financial impact on their bottom line, according to Elemnta.
Hudson Financial Planning has partnered with OpenInvest to launch an online investing solution designed to address Australia’s advice accessibility challenge.
