Retirement savings to be Budget’s real winner

Michael Hutton

The decision by the Federal Treasurer not to tamper with the superannuation system in the 2008 Budget will have positive ramifications for the Australian economy, according to HLB Mann Judd head of wealth management Michael Hutton.

“By resisting any temptation to put his mark on superannuation, the Treasurer has done Australians and the Australian economy a terrific service,” Hutton said.

Hutton argued that changing the super system at this stage, for reasons of short-term expediency, may have hampered long-term savings, which may result in greater pressure on government pensions.

“Although many of the changes in recent years were designed to encourage contributions to super, an unwelcome side-effect that some of our clients have raised with us is that they are distrustful of superannuation because they believe more changes would be made in the future.

“Now, however, they will have more trust in the system and feel encouraged to increase their retirement savings,” he said.

Hutton said the Australian super system is regarded internationally as a world leader and does not need to be tweaked each year.

“Retirement saving is probably the most important issue for the Australian economy over the next 20 years and if we do not encourage more Australians to save for their retirement, the drain on the public purse in both health costs and social security will be immense,” he said.