Don't change super tax in isolation

The Federal Government should not tinker with the superannuation tax settings without first considering the implications for other investments, according to participants in a recent Super Review roundtable. 

Equipsuper chief executive, Danielle Press told the roundtable, sponsored by Comminsure, that while changes to the superannuation tax regime were probably inevitable, they should not be considered in isolation to the tax settings for other investments. 

"I think ultimately the super tax system will change somewhere, I don't know what it's going to look like but it will change, but there also needs to be consideration about what is the other tax on other investment opportunities," she said. 

Press said this was because there was a risk that if high income earners lost the benefit of tax concessions in superannuation, she could "almost guarantee you that it will go into the housing market at the moment and be negative geared". 

VIEW ALL

View all

"And it's still not taxed," she said. "So if you are going to tax, if you're going to change it, make sure you're actually capturing the tax that you want to capture, which means you've got to change the other part of where it's invested because otherwise it simply shifts," Press asid. 

"The fact is that high income earners will always find a tax loophole.  So don't close one and leave 75 open that are actually going to cause bigger economic issues potentially than this," Press said. 

Statewide Super chief executive, John O'Flaherty said he believed that clear objectives needed to be set for superannuation before tinkering took place with the tax settings. 

"If you think back over the last two years of the changes that have been made in the industry by governments, with unintended consequences it's all happened because, in my view, there hasn't been a clear set of objectives about what the retirement income space is supposed to be doing," he said. 

"And it's broader than just super.  It's got pensions, it's got aged care.  So how in the hell can we be making decisions at the micro level about what an adequate balance is, and what should be taxed, and what shouldn't be if we actually don't have an agreed set of objectives?" O'Flaherty asked.