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Costello defends super tax benefits
Former Federal Treasurer, Peter Costello has come out in favour of retaining the tax advantaged status of superannuation, arguing that the Governments are substantial beneficiaries of the regime.
Addressing the SuperRatings Day of Confrontation in Sydney today, Costello said he believed the tax privileges which had been granted to superannuation in Australia were warranted but there was a requirement upon the industry to prove the case by acting in the public interest.
However Costello also pointed out that superannuation needed to be viewed as a supplement to the age pension in Australia rather than as a replacement for the age pension regime.
"What superannuation does is supplement the age pension and turns you from a full pensioner into a part-pensioner," he said.
The former Treasurer said this was why there needed to be closer attention paid to the withdrawal rate and the amount of money that ultimately ended upon in the hands of people once they entered retirement.
Describing Australia as having one of the toughest means-testing regimes in the world, he said that more work needed to be done in relation to post-retirement benefits.
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The future of superannuation policy remains uncertain, with further reforms potentially on the horizon as the Albanese government seeks to curb the use of superannuation as a bequest vehicle.
Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
APRA’s latest data has revealed that superannuation funds spent $1.3 billion on advice fees, with the vast majority sent to external financial advisers.
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