The SMSF Association has used its 2017 federal budget submission to call on the government to commit to stability for superannuation and resist further changes to the system.
“Superannuation funds need a period of stability, not only to ensure that they are able to implement any chances required to meet the new superannuation laws, but to foster confidence in the system,” SMSF Association head of policy Jordan George said. “The government’s moves to enshrine the objectives of superannuation in law are a welcome step in this direction, however, the objectives must be fit-for-purpose to deliver the stability the system so badly needs. “It is also essential to remove super policy from the regular budgetary cycle.” The association’s submission – which also raised issues in relation to housing affordability, infrastructure funding, red tape and how to better integrate super with social security policy – noted super underwent significant upheaval following the 2016 budget and the recent passage of the Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016. “Currently, many fund members and their advisers are working through the actions and strategies required to ensure they comply with the new laws from 1 July,” George added. “In addition to the need to revisit strategies and undertake actions to meet the new rules, many SMSFs will be faced with increased reporting compliance obligations under the new transfer balance cap rules after 1 July.” Consequently, the SMSF Association believed it was essential the government committed to a period of stability for super, free of any significant changes, especially tax settings, he said. “This would allow super funds and their members a period to ensure that they have the correct strategies in place to comply with the new rules and maximise their opportunities to build retirement savings,” he said, adding a period of stability would work to restore much needed confidence in the system. “After a period of significant change, it is important that stability follows so that fund members can have confidence that their retirement savings will not be at the whim of budget policy or more tinkering with the superannuation laws. “Stability for super should extend beyond tax settings and include broader issues such as ensuring that it’s not used to fund first-home deposits – such proposals should be easily evaluated and assessed against strong and fit-for-purpose objectives for super.” On the other hand, sensible changes that improved the system and made it more efficient by reducing red tape should meet the system’s objectives and should proceed, he said.
03 May 2017
By Kristine Lumanta