Govt warned - don't fiddle with superannuation tax
The Federal Government has been warned to avoid further fiddling with the taxation arrangements around superannuation.
In a pre-Budget submission filed with the Federal Treasury late last week, the Association of Superannuation Funds of Australia (ASFA) said the structure of superannuation taxation concessions was equitable and should not be changed at the current moment.
Further, the submission pointed to the relatively short period that Australia's superannuation guarantee regime had been in place, and evidence of why the system should be allowed to mature.
"The Superannuation Guarantee was introduced 20 years ago," the ASFA submission said. "As such, the system has yet to come to maturity.
"Only a small number of people have yet accumulated assets that can deliver more than a comfortable income in retirement," it said.
The submission said ASFA was conscious of a number of organisations that were proposing changes to the structure of superannuation taxation concessions, but urged against the Government embracing such proposals.
"ASFA does not believe that it is time to make major changes to the structure of superannuation taxation," it said.
"Constant change to superannuation taxation arrangements undermines the overall confidence in the system."
The submission said ASFA was therefore urging the Government to broadly maintain the existing structure of superannuation taxation concessions - that is, taxation of concessional contributions and fund investment earnings at 15 per cent.
Elsewhere in its submission, ASFA reinforced its belief that the Government should defer the introduction of a superannuation account cap for higher contributions for those aged 50 and over "in order to allow consideration of the broader treatment of retirement income products and enable the Government's superannuation reforms to be implemented".
"ASFA is concerned that implementing the Government's $500,000 account balance threshold will be borne by all superannuation fund members, including low income earners, and that there may be another way to achieve the outcomes the Government is after," it said.
The submission said ASFA's preference was for a contribution cap of $50,000, but in the context of Government fiscal constraints, a contribution cap of $35,000 was appropriate.
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