Brad Fox – CEO – AFA

The Association of Financial Advisers (AFA) welcomes the passing in the House of Representatives today of the Tax and Superannuation Laws Amendment (Increased Concessional Contributions Cap and Other Measures) Bill 2013 (the Bill) which increases the concessional contributions cap for older Australians.

The AFA also notes the passing of legislation, in the same Bill, that doubles the contributions tax rate for Australians earning over $300,000.

AFA CEO Mr Brad Fox said, “The increase in the concessional contributions cap to $35,000 from 1 July this year for those 60 and over, and from 1 July 2014 for those 50 and over, will allow older Australians to better prepare for retirement.” 

Mr Fox said this move is particularly welcome given that older Australians have not had the benefit of the Superannuation Guarantee Charge (SGC) for the full duration of their working lives.

“This measure will be very beneficial for those mature Australians who have the capacity to take advantage of it,” he said. “However, while we are pleased that the legislation has been passed, we would prefer to have seen the higher cap for older Australians introduced as a permanent measure through indexation, rather than as a short term measure.”

Mr Fox said the AFA has reservations about and does not support the increase in superannuation contributions tax for higher income earners.

“While we appreciate the current budgetary pressures on the Government, we don’t support this measure which acts as a disincentive for superannuation contributions and increases the overall complexity of the Australian superannuation system,” he said. “This also has implications for attracting and retaining executive talent in Australia and can be seen as a disincentive for people to aspire to greater earnings.”

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