The Federal Government has been urged to see off the NIMBYs by holding the line on most of the core elements of its Budget superannuation changes.
Superannuation ratings agency, SuperRatings has this week released an analysis of the Budget changes and has urged the Government not to be spooked by the rhetoric from vested interest groups.
In doing so, the company is proposing that the Government implement a traffic light approach to the Budget changes — green-lighting that assets in the pension phase be limited to $1.6 million, placing an amber light on the retrospective $500,000 lifetime cap by removing the retrospectivity, and red-lighting the reduction in the concessional contribution cap to $25,000.
The SuperRatings analysis said the company believed the Government deserved to be highly commended for attacking the biggest problem that tax-payers face, namely the unlimited tax-free status of superannuation pension phase assets.
“The concept of capping same is well thought out by providing protection to those already in retirement, whilst capturing those who have sought to maximise the inequities of the current system,” it said.
“If this proposed legislation is not passed, then future generations face larger economic black holes from superannuation that will quickly escalate into the hundreds of billions of dollars.”
However on the question of retrospectivity, the analysis said retrospectivity in superannuation could only breed a lack of confidence.
“Middle class Australians, whilst wary of super, at least continue to support it. However, if any Government starts retrospectively taking away benefits, the industry and our Governments’ desire for Australians to self-fund retirement, could be severely hampered,” it said.
“Lastly, whilst in one breath the Government sets a pseudo “this is enough” cap for pension benefits, in the very next breath it says, for those on the wrong side of 50, we are going to make it virtually impossible for you to get there! Illogical, inequitable and completely irrational.”
