POWERED BY MOMENTUM MEDIA
Reality urged on super tax concessions
The Federal Treasury has been warned against allowing misleading estimates of the value of superannuation tax concessions to gain currency lest they give rise to adverse policy changes.
In a submission to the Tax Analysis Division of the Treasury, the Association of Superannuation Funds of Australia (ASFA) has reinforced the importance of using accurate and relevant tax expenditure statements when dealing with the question of the tax treatment of superannuation.
“Figures relating to the cost to revenue of superannuation tax concessions are often used in public debate and commentary, usually by those who would like to scale back those concessions and/or pursue other programs,” the ASFA submission said.
It said the estimates that are used could have an impact on the perception of superannuation by both policy makers and the public and hence on the direction of future reforms and changes.
“Given the crucial role played by tax concessions in attracting voluntary savings for retirement and maintaining public acceptance for compulsory private retirement saving, it is important that accurate and meaningful estimates are calculated and disseminated,” the ASFA submission said.
“Superannuation has a key role in meeting the retirement income expectations of what is a demanding ‘baby boomer’ generation and in containing future Age Pension costs of government,” it said. “If misleading estimates gain currency then there would be a danger that changes to the tax system might be made which undermine private savings and the role of superannuation.”
The submission said that if this occurred it would be an unsatisfactory outcome for Australia given the role of saving through superannuation in supporting investment in Australia and in providing the necessary financial support for an ageing population.
“The Treasury in the TES documentation sets out limitations of the methodology used. However, these limitations are seldom acknowledged in public debate, and ASFA considers that other theoretically sound approaches to estimating tax expenditures have not been given the attention that they deserve.”
Recommended for you
In its pre-election policy document, the FSC highlighted 15 priority reforms, with superannuation featuring prominently, urging both major parties to avoid changing super taxes without a comprehensive tax review.
The Grattan Institute has labelled the Australian super system as “too complicated” and has proposed a three-pronged reform strategy to simplify superannuation in retirement.
Super funds delivered a strong 2024 result, with the median growth fund returning 11.4 per cent, driven by strong international sharemarket performance, new data has shown.
Australian Ethical has seen FUM growth of 27 per cent in the financial year to date.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
36.43 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
35.08 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.72 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
5
Global X GlobalX FANG+ ETF
27.64 3 y p.a(%)
