Shorten commits to lifting concession caps

The Gillard Government is committed to increasing the super guarantee and the super concessional caps, according to the Minister for Financial Services and Superannuation, Bill Shorten (pictured).

Briefly addressing delegates at the Self-Managed Super Fund Professionals’ Association of Australia conference in Brisbane, Shorten said that Australia currently sat fourth in the world in terms of funds management, but it was only seventh in the world for its retirement income system.

“While we are doing alright with money under management, our retirement incomes system needs to be better,” he said, adding that from 2012, for those aged over 50, contributions up to $50,000 would be taxed concessionally.

“I know that some of you would say that there shouldn’t be any concessional caps at all, and I can see that argument,” Shorten said. However, he said the Government was trying to make improvements at the other end of the market and, for those who earn less than $37,000 per annum, contributions into super would not be taxed at all.

“The other thing that we are trying to do is lift the superannuation guarantee from 9 per cent to 12 per cent,” he said.

Shorten assured the audience that the Gillard Government considered the self-managed super fund (SMSF) to be a legitimate investment structure.

“We believe that Australians that want to save money for retirement should have the ability to choose the method by which they take their own precautions and steps to preserve their income for when they retire,” he said, adding that in the opinion of the Government, all the various forms of superannuation “have their own beauty”.

He said the Government would like to see Australian Prudential Regulatory Authority funds adopt more of the positive attributes of the SMSFs.

“The thing that attracts me to the SMSF model is the control you have over your future. We are implementing changes to SMSFs, none of which should panic anyone,” he said, referring to the drive for greater compliance and competency standards.

Shorten also noted that the Government was against the Henry Review recommendations for taxation followed by rebates.

“We think that’s a clunky system. If superannuation is compulsory, it should be concessional. What we need to do is take away the tax uncertainty,” he said, adding that those in their 20s and 30s need to be confident about the super tax strategies implemented today and confident that super will not change.