Super tax changes a worry for bank customers

Banks are having to deal with numerous calls from anxious customers due to the potential increases to tax on super, according to the Australian Bankers' Association (ABA).

"We've been advised by banks that many customers are concerned about their financial security in retirement because of speculation the Government plans to increase the level of tax on retirement savings," said ABA chief executive Steve Munchenberg.

Munchenberg said that although successive Governments had encouraged Australians to save for their retirement and recent reforms had encouraged the same thing, the current proposals were having the opposite effect.

"The proposals now being considered appear to reverse that approach," he said.

VIEW ALL

View all

"Ongoing speculation and change undermines confidence in superannuation, discouraging Australians from making voluntary contributions and raising uncertainty over whether superannuation delivers the financial security customers are looking for," he said.

As the population aged and living expectations increased, Governments' overriding priority should be to encourage people to save for retirement, ABA said, but constant changes to the super system and increased taxes were working against that goal.

"Unfortunately, if they only rely on compulsory super contributions from their employers and don't make any voluntary contributions, most working people will be well short of what they need for a decent standard of living after they leave the workforce," he said.

Munchenberg said this would increase reliance on the age pension in the future.

"Bank customers need a commitment from both major parties that they will not make continual changes to superannuation that undermine the security superannuation is meant to give Australians who have worked and saved all their lives," he said.