Changes super irksome
SAVERS have almost 50 reasons to be frustrated with superannuation, and their confusion over constantly changing rules looks set to increase.
Rule changes to super have been announced at least 48 times in the past 10 years, a new analysis has found, and both sides of politics are tipped to increase their tinkering as the federal election, royal commission and other investigations shake up the system.
Opposition Leader Bill Shorten set the scene this week with four more changes.
While they were welcomed for helping women save more for retirement, super specialists say constant tweaking of the nation’s $2.6 trillion retirement saving system is driving people away.
Opinion is divided about whether more changes are needed, with some saying super’s tax incentives are still too generous for wealthy Australians.
News Corp Australia’s analysis found that rule changes had intensified in the past two years, with 26 announced since 2016.
The CEO of industry group ASFA, Dr Martin Fahy, said changing super rules dented people’s confidence and there should now be a period of stability, but he expected both the Coalition and Labor to address super in the lead-up to the election.
“Over time the proportion of superannuation contributions that are voluntary has declined,” he said.
Wealth for Life Financial Planning principal Rex Whitford said constant changes were “a breach of trust”.
“A lot of people lose faith in the system and it destroys confidence in planning for retirement,” he said.
Mr Whitford criticised the Coalition government’s moves in recent years to restrict how much money pre-retirees could pump into super.
“If a Liberal Party can do this, what would an emboldened Labor Party change?”
Grattan Institute CEO John Daley said there would be big changes ahead if only half of the Productivity Commission’s recent recommendations for super were followed through.
He said current super tax concessions – such as tax-free pensions for anyone over 60 – could be reigned in further.
“Treasury estimates that the super system is costing us more in tax concessions than we are saving in age pension and that will continue until 2060,” Mr Daley said.
“The vast majority of people who put money into super are already pretty wealthy and seeking tax advantages.”
Australian Institute of Superannuation Trustees CEO Eva Scheerlinck said super rules would always be tweaked and many did not affect most people. She said Labor’s announced changes this week were “very positive for women, as well as low income men, and are overdue”.