Treasurer Chris Bowen has announced that a Rudd Labor Government will make no major changes to superannuation tax for five years immediately after the election, but the move has been criticised by the Opposition.
The announcement comes as a welcome development for the SMSF Professionals’ Association of Australia (SPAA).
“The commitment by the Government and Opposition to both make a commitment to no detrimental change is a step in the right direction to achieve bipartisan support for a more sustainable superannuation system that gives people greater confidence going forward,” said SPAA chief executive Andrea Slattery.
“Several recent reports that SPAA has commissioned have graphically illustrated that people’s confidence in the system is being undermined, and this commitment to not change superannuation tax policy by the Government and Opposition should help reverse this sentiment.”
ASFA CEO Pauline Vamos says that a freeze will give policy makers “time to consider how we can evolve our superannuation system to accommodate the challenges posed by an ageing population”.
“Let's not forget that the industry is currently in the process of implementing significant regulatory changes as a result of the Stronger Super and FoFA reforms as well as other tax legislative measures. There are still a number of issues relating to timing, transition and impact that need to be worked through and we urge the Government and regulators to work closely with industry in order to achieve the best outcomes for funds and their members.”
The Coalition does not trust Bowen’s commitment to freeze super for five years, however, and says such a move would be irresponsible.
“A total commitment to no change at all would mean that the current lack of competition in the default funds market would remain entrenched and that there would be no capacity to improve corporate governance arrangements in line with relevant Cooper Review recommendations,” said shadow assistant Treasurer, Mathias Cormann.
Cormann says that it also prevents re-visiting concessional caps or super co-contribution benefits once the budget is in a strong enough position.
“Positive, beneficial changes to superannuation policy settings must be possible.”