Super issues too hot to handle for Govt
The use of negative gearing and capital gains tax benefits inside of superannuation were too problematic for any government to address, according to Challenger chair of retirement income Jeremy Cooper.
Speaking at a panel session at the Citi Investment Conference chaired by Citi Transactional Services senior adviser Nick Sherry, Cooper said the previous Federal Government had formed a cross-industry working group to tackle policy issues within the area of superannuation and retirement income.
"We looked at whether policy around superannuation could be governed by an independent body and filter all policy proposals for super through considerations around taxation and access to super and so on," he said.
"These kind of issues — changing franking credits, changing the CGT exemption on the family home and negative gearing — are probably too toxic for any government to seriously look at," Cooper said.
"I am not saying they are not important issues, but if we had a body that was independent of politics it could highlight the options and look at addressing these while getting a benefit somewhere else.
"But there are a handful of issues that are so toxic they can't be dealt with, and a working group is only place to have a thrash around and look at them."
Despite these issues, Cooper said that superannuation fund leakage to the self-managed superannuation fund (SMSF) sector was a sign that consumers were aware of what funds were offering and had chosen their own retirement investment vehicle.
"It is a healthy battle and one of the rare occasions in this industry when the customer gets the choice and competition. As a result we have seen large funds emulating the customer experience in the self-managed space," Cooper said.
"We also need to consider what SMSFs are. They are a wrapped vehicle for retirement with a structure for efficient tax outcomes, and it is up to the rest of the industry to compete with that — so it is a healthy shakeout of what the customer wants."
Recommended for you
AMP is to launch a digital advice service to provide retirement advice to members of its AMP Super Fund, in partnership with Bravura Solutions.
Unveiling its performance for the calendar year 2024, AMP has noted a “careful” investment in bitcoin futures proved beneficial for its superannuation members.
SuperRatings has shared the median estimated return for balanced superannuation funds for the calendar year 2024, finding the year achieved “strong and consistent positive” returns.
The second tranche of DBFO reforms has received strong support from superannuation funds and insurers, with a new class of advisers aimed to support Australians with their retirement planning.
