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Govt urged to clarify Budget
The superannuation industry is pressing the Government to resolve some of the key uncertainties resulting from announcements made in the Federal Budget.
The Government has been warned that unless the uncertainties are clarified, the industry will struggle to implement the Budget changes in a fair and equitable manner.
The pressure is being applied in the form of submissions being filed with the Government as part of the consultation process surrounding the Budget changes, with having raised a number of key concerns.
Mercer chief executive said while many of the Budget changes were positive, some of the measures would be difficult to implement in an efficient and equitable manner when many uncertainties needed to be resolved.
“In essence, we need to ensure that our framework for retirement planning is as effective and as appealing as it can be to all involved,” he said.
“We are concerned that there are some anomalies creating unnecessary complications, and reminiscent of the superannuation surcharge administration,” Promnitz said. “This will result in unnecessarily complex procedures and increased costs for all fund members, and complexities that will impact employers.”
Mercer cited one anomalous area as being the proposal to apply exemptions to the planned cap of $150,000 per person per year for undeducted contributions — something it said would create inconsistencies.
“Furthermore, the plan to return excessive contributions to the individual, yet tax investment earnings on these excessive contributions, will be very difficult to implement,” Promnitz said.
“This will result in additional costs and complexity for the sake of a measure that is going to limit superannuation savings for a very small percentage of the population,” he said.
AUTHOR
Mike Taylor
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