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Accountants call for removal of contribution caps
Just days out from the Federal Budget, Chartered Accountants Australia and New Zealand superannuation leader, Tony Negline has advocated for key superannuation changes including removing the annual non-concessional contribution caps.
In an opinion piece to be published next week, Negline argues that removal of the annual non-concessional caps would enable people to invest their money in superannuation whenever they were able.
“Currently, there are annual caps on both the amount of concessional (before-tax) and non-concessional (after-tax) contributions that can be made into your super account,” he said. “The annual cap for non-concessional (after tax) contributions is $100,000 if your total super balance is less than $1.6 million.”
“$100,000 might seem like a lot, but there might be years every now and then when it is worth investing more than that sum, and at the moment you can’t,” Negline wrote.
He suggested that a fairer way for, for example, elderly people approaching retirement, or younger people on high incomes taking a career break that doesn’t break retirement plans, might be a lifetime contribution caps, to account for the various working patterns of Australians.
“To assume that every Australian will make constant contributions, at a constant rate throughout their working life, is just silly,” Negline wrote.
“The Government needs to remember that most people’s super contributions will only occur later in life, therefore a contribution cap needs to be set at a level that reflects this, not detracts from it.”
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Good luck selling that to the Labor, which has flagged its desire to reduce the annual NC cap even further!