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Rudd Govt intent on move to pensions and annuities: Costello
Former Federal Treasurer Peter Costello believes the Rudd Labor Government is intent on compelling Australian superannuation fund members to adopt pensions and annuities rather than opting for lump sums when they retire.
Addressing a Pensions and Investment Summit on the Gold Coast, Costello said he believed the Government’s policy was being driven by its desire to reduce tax expenditures.
“They do seem to be driven to reduce tax expenditures and appear to be making an effort to get more people into pensions and off lump sums,” he said.
The former Treasurer said there were those in his old department who had been very focused on and concerned about the number of Australian retirees taking lump sums and who seemed to believe that Australians could not be trusted with their lump sums.
However, he said his own analysis was that Treasury’s concerns were ill-founded and that the notion that Australians simply frittered away their superannuation lump sums was just an urban myth.
Discussing the global financial crisis, Costello said he believed the worst might be over but that a relatively shallow recession in Australia suggested it would experience only a modest rate of recovery.
What is more, he claimed that the high levels of stimulus and liquidity injected into the global economy would inevitably sow the seeds of the next crisis.
AUTHOR
Mike Taylor
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