SUPERANNUATION – GOVERNMENT POLICY – AUSTRALIA

Keating says 12pc super is 25 years late but worth wait

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 1-Jul-25

The compulsory superannuation guarantee will rise by 0.5 per cent to 12 per cent today, following progressive increases in recent years. Former prime minister Paul Keating – considered to be one of the ‘architects’ of Australia’s super system – has welcomed the milestone but says it should have been reached in 2000. The Coalition government of the era froze the guarantee at nine per cent, a policy which remained in place until 2013. Keating contends that the delay has cost some workers up to $300,000 in retirement savings. He opposes the federal government’s proposed changes to the tax treatment of super, particularly the taxation of unrealised capital gains.

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Super tax may cost more than it raises

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Original article by Glenda Korporaal
The Australian – Page: 17 : 15-Mar-23

The SMSF Association will establish a working group of technical experts which will assess the federal government’s proposed changes to super tax concessions. CEO Peter Burgess says the proposed reforms could potentially prove to be as disastrous as the super surcharge regime, which cost more to implement and run than it raised in tax revenue. Burgess adds that the SMSFA is concerned that the proposed changes could have unintended consequences and could affect public confidence in super.

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SMSF ASSOCIATION

Labor concedes super tax rise to hit more retirees

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Original article by Phillip Coorey
The Australian Financial Review – Page: 7 : 7-Mar-23

The federal government’s plan to increase the tax on earnings on superannuation balances above $3 million from 15 to 30 per cent is currently only slated to impact 0.5 per cent of all superannuation account holders. However, the government has confirmed that this will rise to one in 10 people within 30 years, because the cap will not be indexed to inflation. Treasurer Jim Chalmers has stated that if a future government wants to index the cap, then that would be their prerogative.

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AUSTRALIA. DEPT OF THE TREASURY

Super-sized broken promise

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Original article by Geoff Chambers, Patrick Commins
The Australian – Page: 1 & 4 : 1-Mar-23

The federal government has announced that it will increase the concessional tax rate for superannuation balances of more than $3m from 15 per cent to 30 per cent. The tax reform will be included in the May budget and legislated during the current term of parliament; however, it will not take effect until 1 July 2025, after the next federal election. Labor had ruled out changes to the super tax regime during the 2022 election, and shadow treasurer Angus Taylor has described the backdown as another broken election promise. The super changes are expected to hit about 80,000 individuals, and Prime Minister Anthony Albanese has emphasised that 99.5 per cent of Australians will not be affected.

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AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Ex-RBA governor questions super aims

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Original article by David Ross
The Australian – Page: 4 : 22-Feb-23

Former Reserve Bank of Australia governor Bernie Fraser says the federal government’s legislated objective for superannuation should include allowing people to use part of their accumulated savings to buy a home. The government’s draft purpose statement for super says amongst other things that it should "preserve savings to deliver income for a dignified retirement". Fraser contends that there is no more comforting thought for Australians than knowing that they will have somewhere to live when they retire. He has also questioned the government’s proposal to allow super funds to invest in social projects, noting that they tend to have low returns.

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D-Day for dud superannuation funds

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Original article by Michael Read
The Australian Financial Review – Page: 3 : 1-Jul-21

Superannuation Minister Jane Hume says the federal government’s new online tool aims to encourage superannuation fund members to exit underperforming funds. The YourSuper tool will be launched on 1 July, and will initially allow super fund members to rank and compare default funds based on their performance over six years. The tool will be expanded to include the majority of non-default funds in mid-2022. The tool can be accessed via the MyGov portal or the Australian Tax Office’s website. It is part of the ‘Your Future, Your Super’ reforms.

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AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN TAXATION OFFICE

Taxes down, super up from today

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Original article by Michael Read
The Australian Financial Review – Page: 13 : 1-Jul-21

The corporate tax rate for small and medium enterprises with turnover of less than $50m will be reduced by one per cent to 25 per cent on 1 July. Other changes that take effect at the start of the new financial year include an extension of the low- and middle-income tax offset and an increase in the superannuation guarantee from 9.5 per cent to 10 per cent. The Association of Superannuation Funds of Australia estimates that the super change will boost the retirement income of the average worker by about $19,000. New measures aimed at first-home buyers also take effect on 1 July.

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THE ASSOCIATION OF SUPERANNUATION FUNDS OF AUSTRALIA LIMITED

Bosses and unions unite to urge senator’s vote against seriously flawed super reform bill

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Original article by Patrick Commins
The Australian – Page: 7 : 7-Jun-21

The ACTU and the Australian Industry Group have joined forces to call for the ‘Your Super, Your Future’ legislation to be rejected by the Senate. They contend that the bill still has some major flaws; it recently passed the lower house following the removal of provisions which allow the federal government to veto investments made by superannuation funds that are not deemed to be in members’ best interests. Amongst other things, the ACTU and the Ai Group are concerned that the bill will result in people being stuck in underperforming super funds.

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ACTU, THE AUSTRALIAN INDUSTRY GROUP

‘Ideology gone mad’: Silk slams super veto laws

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Original article by Cliona O’Dowd
The Australian – Page: 17 : 9-Apr-21

AustralianSuper CEO Ian Silk has criticised key elements of the federal government’s proposed superannuation reforms. He is particularly concerned about provisions of the ‘Your Future, Your Super’ bill which allow the government to block an investment by a super fund, even if it is in members’ best financial interests. Silk says that amongst other things, this raises genuine concerns about sovereign risk. David Knox of consultancy firm Mercer in turn warns that subjecting super funds to performance tests will result in lower returns over the longer term, as trustees will be reluctant to invest in some asset classes.

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AUSTRALIANSUPER PTY LTD, MERCER INVESTMENTS PTY LTD

Proposed super changes anti industry funds

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Original article by Glenda Korporaal
The Australian – Page: Online : 5-Jan-21

ACTU assistant secretary Scott Connolly claims the federal government’s Your Future, Your Super legislation will disadvantage the $750 billion industry superannuation fund sector. Connolly notes proposed investment performance comparisons for "low-budget" MySuper accounts only include investment returns and exclude administration fees. He says industry funds typically charger lower administration fees, and Connolly claims the federal government is favouring for-profit super funds under the legislation. The proposed investment performance comparisons in the legislation currently only apply to the low budget MySuper sector, which industry super funds currently dominate.

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ACTU