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ASFA warns Henry Tax Review
A combination of the Federal Budget and indications from the Henry Tax Review panel run the risk of undermining confidence in the superannuation system, according to the Association of Superannuation Funds of Australia (ASFA).
In a further submission to the Henry Tax Review, ASFA has sharpened the tenor of its rhetoric and challenged some of the interim statements of the review on both the level of the superannuation guarantee and the concept of soft compulsion.
It said that the 2009 Federal Budget had introduced changes that had been interpreted by many as altering the long-held philosophy that a combination of compulsory and voluntary superannuation contributions was the means by which all Australians could achieve an adequate and dignified retirement.
“ASFA’s concern is that this perception that support for superannuation has been seriously curtailed will become increasingly common and that what will follow will be a lack of confidence in the superannuation,” it said.
“This may not be the intention of the panel, but it appears likely to be the outcome if not remedied in the final report,” it said.
“Constant changes (especially adverse changes) to the system result in people leaving the superannuation system or making less use of it in favour of what is perceived to be a more stable alternative,” the ASFA submission said.
It said tinkering with the system (together with speculation about future changes such as an increase in the preservation age) would discourage people from consolidating their long-term saving in superannuation.
AUTHOR
Mike Taylor
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