Q WHAT WILL A POSSIBLE NEW GOVERNMENT MEAN FOR SUPER?

Superannuation has long been in the sights of policymakers. It’s not only one of the largest pension funds in the world but is mandated to grow by almost 10% a year. This makes superannuation a critical part of the Australian economy, and one that is likely to be impacted by a change in government.

Perhaps the biggest change will be Labor’s proposed ban on excess franking credits, which will impact many self-funded retirees with an SMSF. The difference between the company tax rate and the individual’s marginal rate has enabled some self-funded retirees to receive a tax rebate and boost their income in retirement. This benefit is likely be taken away under a Labor government.

We may see the Productivity Commission recommendations regarding changes to the default fund model and board governance move down the priority order for a new Labor government. However, the fee caps, under-25 life insurance reforms and small balance initiatives from this year’s federal budget are likely to be supported as they currently stand.

Josh Callaghan, general manager for wealth, Canstar