The self-employed should be compelled to become part of the super guarantee regime.
That is the assessment of the Association of Superannuation Funds of Australia (ASFA) which has used a supplementary submission to the Tax White Paper process to argue for a broadening of the coverage of superannuation.
While reinforcing the fact that the tax concessionality of superannuation should top out on account balances of $2.5 million, the ASFA supplementary submission also makes clear the need to rope in the self-employed.
“There is a strong policy case to extend the compulsory superannuation regime to include some or all of the self-employed,” the submission said.
“Nearly ten per cent of the labour force is self-employed. Only a relatively small number of the self-employed have business assets sufficient to support a comfortable standard of living in retirement,” it said.
“While tax concessions have led to some self-employed saving for retirement through superannuation, average balances and coverage have remained relatively low.”
The submission argued that while accountant balances were growing as the superannuation system matured, many people will still retire with inadequate superannuation savings to fund the lifestyle they wanted in retirement.
“There should be no further delay to the scheduled increases in the Superannuation Guarantee (SG) to eventually reach 12 per cent of wages, and desirably the timetable should be condensed.”
It said women in particular benefited from the compulsory superannuation system and that the Low Income Superannuation Contribution (LISC) should be retained after 2017 as it assisted low-income earners to achieve adequacy of retirement incomes.
