Jones outlines how Govt will strengthen super system
Assistant treasurer, Stephen Jones, has outlined the Government’s intentions to strengthen the superannuation system, stating an objective is needed followed by discussions about taxation concessions.
Speaking at the AFR Super & Wealth Summit in Sydney, Jones said it was important that super had a defined objective similar to other initiatives such as Medicare.
“We can’t get everything settled for the long term unless we have an understanding of what we are trying to do. Super is a fundamental foundational piece of public policy but I could ask 20 people in this room what they think the objective is and receive 10 different answers.
“We will put the objective cart after the horse and ensure we have a proper conversation about the objective before we talk about taxation arrangements.
“We want to incentivize people to save and ensure that is preserved until they are 65. But that needs to be solidified with a defined objective.”
Once an objective had been decided, this would be followed by discussions about high-balance self-managed super fund (SMSF) balances. He said the Government was not discouraging Australians from saving but whether super was the right structure for those savings.
“You would struggle to convince the Government that a balance with $100 million is all retirement savings, you would struggle with that.
“We need to tidy up super arrangements and distortions in the system that don’t look right and is costing the Budget.
“We aren’t saying you shouldn’t put money away or not leave money for your kids, we are asking what is the role of super in doing that? If you want to leave a huge estate, great, but the question has to be asked how much is the role of super and how much should super be supporting that?”
However, he said the Government had yet to define a specific amount which it felt was too high for balances.
AUTHOR
Laura Dew
Recommended for you
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
Iress has appointed Insignia Financial’s former general manager of master trust and insurance products as its newest CEO of superannuation, who will take over from Paul Giles.
...'ensure that is preserved until they are 65'!!!! WTF?
Oh, yes... I have several clients with $100M in their Super... definitely need to reconsider that problem.
Simple answer is to equate what capital would be necessary to provide the current age pension for a couple at todays available interest rate OR more relevant the capital required to provide for a pollies pension. You will be shocked and find it much more that currently what is available to self funded retirees.
Yes, because that's the most pressing issue at the moment :P