The Government may have signalled its preparedness to move on reducing deeming rates but it is not prepared to move on superannuation draw-down rates for those aged over 65.
The Treasurer, Josh Frydenberg, used a Sydney radio interview to make clear that Government’s unwillingness to change the draw-down rate formula, despite acknowledging that the deeming rates warranted a review.
In doing so, Frydenberg reinforced the point that the superannuation was not intended to be a wealth accumulation vehicle, but something spent inside the lives of account-holders.
“… it's supposed to be either a substitute or a supplement to the aged pension,” the Treasurer said. “That's why you get a concessional tax arrangement in relation to your super. And when the Government Actuary looked at the current minimum draw down rules, they found that it would lead to people at death still having around 25 per cent of that initial balance in their accounts.”
“It's not meant to be a wealth accumulation vehicle, super, it's supposed to be spent during our lives,” he said.