Super rules must change: SupeRatings
The Government has supposedly weathered the storm and protest over their proposed superannuation changes. So hopefully they won’t suddenly collapse in a heap to appease all of the “NIMBYs”, which in turn will be to the detriment of the large majority of Australians.
SuperRatings has calculated that even after capping assets in the superannuation pension phase at $1.6 million, a couple will be able to generate tax-free earnings from up to $5 million in savings. As Chairman of SuperRatings, Jeff Bresnahan, commented on this finding “If a retired couple can generate over $225,000 in tax free earnings per annum from their existing capital in the current low rate environment, and our elected representatives would consider giving them more, then we have completely lost the plot”.
In the same vein he goes on to say “Any politician who votes against implementing a $1.6 million superannuation cap would surely be committing political suicide. Even worse would be a coalition member who would consider crossing the floor on this part of the legislation”.
After analysing the key proposed superannuation changes, SuperRatings is of the view that:
- The $1.6 million pension cap must be implemented
- The $500,000 lifetime cap on non-concessional contributions cannot be retrospective
- The concessional annual contribution limit of $25,000 is inequitable
The attached Media Release provides additional detail on our review of the proposed changes and the reasons why the Government has got the proposed changes both absolutely correct in some areas and so far wrong in others. This is the Government’s key opportunity to reinforce confidence in superannuation as the preferred savings mechanism. Failure to get the changes right will erode such confidence to the point where middle Australia will look elsewhere to fund their retirement.
