POWERED BY MOMENTUM MEDIA
FSC challenges Treasury on super concessions
The Financial Services Council (FSC) has sought to put an end to Federal Treasury suggestions that Australia's superannuation tax concessions are unsustainable.
The FSC has used its pre-Budget submission to not only argue that the Government should accept the validity of the tax concessions granted to superannuation but that it should be something which is included in the forthcoming Tax White Paper.
The submission states bluntly that the Government [should] "recognise that a tax concession is a necessary precondition to requiring employees to contribute to their superannuation from their income and boosts national savings by encouraging Australians to save for their retirement".
"The fiscal impact of tax concessions afforded to superannuation earnings and contributions in the Budget do not take into account the reduced expenditure on the age pension, or other age-related health care costs, which results from more people becoming self-funded retirees," it said. "By definition, the superannuation system is needed to meet these long-term costs. Australians would not otherwise adequately save for their own retirement."
The FSC submission has confronted the Treasury head-on suggesting that the department's Tax Expenditures Statement is misleading in classifying the taxation of superannuation entity earnings as a ‘concession'.
"Without compulsory superannuation Australians would change their behaviour and the $1.7 trillion in retirement savings would be spent and invested elsewhere," it said.
"The Tax Expenditures Statement assumption that behaviour would not change, which is the basis of the revenue cost, is highly improbable. Instead, it is far more likely that, in lieu of superannuation existing, a significant portion of the revenue would be ‘lost' as individuals would ‘save' via the tax free family home, or spend a portion of their income on the 40 per cent of goods and services that escape the GST, reducing the overall size of the taxable pool of national savings."
Recommended for you
Aware Super has made a $1.6 billion investment in a 99-hectare industrial precinct in Melbourne’s North which, the fund clarified, also houses the nation’s first privately funded open-access intermodal freight terminal.
ASFA has affirmed its commitment to safeguarding Australia’s retirement savings as cyber activity becomes an increasing challenge for the financial services sector.
The shadow treasurer is not happy with the performance of some within the super sector, telling an event in Sydney on Thursday that some funds are obsessed with funds under management, above all else.
As the Australian financial landscape faces increasing scrutiny from regulators, superannuation fund leaders are doubling down on their support for private markets, arguing these investments are not just necessary but critical for long-term financial stability.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
GAM LSA Private Shares AU I
37.08 3 y p.a(%)
2
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.63 3 y p.a(%)
3
Fidante Credit Suisse Global Private Equity
31.12 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
28.28 3 y p.a(%)
5
Plato Global Alpha A
27.76 3 y p.a(%)
