Super tax regime works says Rice

10 July 2014
| By Mike |
image
image
expand image

The existing tax regime around superannuation works and does not warrant significant change, according to the chief executive of leading actuarial firm, Rice Warner, Michael Rice. 

In an analysis published by the consultancy this week, Rice claims that the fundamental issue missing in recent debate over the concessional tax treatment of superannuation is simply that the current system works, albeit that some simple enhancements would improve it. 

“But a wholesale restructuring of the taxation of super, aimed at creating more equitable and adequate retirement outcomes, would deliver little additional benefit,” he said. 

Rice said that his firm supported upholding current taxation concessions, along with some further policy enhancements such as allowing concessional caps for couples at 150 per cent of the single person’s cap (even if one partner is not working) and limiting non-concessional contributions to no more than concessional ones. 

“Put simply, tax concessions work,” his analysis said. “It provides compulsion for employers to contribute for their employees and stimulate incentives for voluntary contributions.” 

Rice said that as the May 2014 Federal Budget had shown, the cost of looking after retirees in Australia was the nation’s largest expense at $40 billion a year. 

“This figure is projected to increase significantly to $50 billion in 2018. In addition, as the baby-boomer generation moves through retirement, we can expect health costs and aged care costs to grow rapidly. But these costs are the result of inadequate savings by previous generations,” he said. “We simply need to enable working age Australians to build reasonable superannuation in order to help reduce their own costs in future.” 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

1 year 4 months ago
Kevin Gorman

Super director remuneration ...

1 year 4 months ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

1 year 4 months ago

Future Group is set to take on nearly $1 billion in funds under management (FUM) and welcome more than 100,000 new members following two significant successor fund transf...

2 days 12 hours ago

The International Monetary Fund (IMF) has issued a sobering assessment of the global economic landscape in its latest World Economic Outlook, dramatically revised after D...

2 days 15 hours ago

Growth from the listed company’s key businesses has propelled Generational Development Group to new milestones in the three months to 31 March....

2 days 15 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND