Superannuation roundtable must be wary of impacts
The Federal Government needs to consider what impact any changes to Australia's superannuation regime will have on various sectors of the community, according to Institute of Chartered Accountants' superannuation specialist Liz Westover.
Commenting on the Government's establishment of a superannuation roundtable, Westover said improvements to the system could mean different things to different people, and pointed to the situation with respect to retirement incomes' adequacy and the range of options being canvassed.
She said one option being discussed was the removal of the $450 per month threshold for payment of superannuation guarantee (SG) amounts for employees, so that workers earning less than this amount will receive some form of superannuation.
"However, when you consider the potential impact on employers, particularly on small businesses, I don't see this as a viable solution," Westover said.
"Employers are already tasked with the collection and payment of SG for their employees. The removal of the threshold would only increase the administrative and financial burden on employers, which may be significant for small business owners," she said.
"Such an increase in the administrative burden may result in many owners rethinking their employment of these workers, meaning those workers may be left without any income, let alone superannuation."
Westover said the payment of the superannuation guarantee to these low-income earners would involve minor amounts and deliver only a marginal impact to their retirement savings.
"The reality is for low-income earners, money in their pocket now is often a higher priority than saving for retirement," she said.
"Good policy development in superannuation weighs up the pros and cons of changes to the super system and determines how it will impact on other areas of the community," Westover said.
"In taking counsel from industry spokespeople at the superannuation roundtable, the government will need to be very careful to ensure the needs of other sectors are not being unduly imposed on."
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