The frequent changes to superannuation policy have been having a significant negative effect on Australian superannuation fund members, particularly women seeking to increase sometimes meagre balances.
That was the message delivered to the Senate Economics References Committee inquiry into Economic security for women in retirement during a recent public hearing.
Australian Seniors deputy chief executive, Sarah Saunders pointed to the lack of certainty around superannuation policy as being a major inhibitor and told the committee that the Governments needed to stop random, ad hoc changes aimed at propping up budgets.
“Australians want certainty,” she said. “We need a clearly articulated retirement income strategy that is above politics and crosses portfolios.”
“As a nation we cannot allow ad hoc, random changes to prop up budgets, as they undermine faith in the system for not just this generation of retirees, but younger people and women, who are not convinced that by the time they get to retirement the rules would not have changed and that it might have been better to put that money towards something else,” Saunders said.
In doing so, she provided the example of the asset test and taper rate changes that were announced in the 2015 budget.
She said people had been given only 18 months’ notice and, on current deeming rates, would see a single woman who has worked and saved living off less than the full age pension.
“Finally, when we make changes, even to super concessions, we have to think very, very carefully about who might be impacted, ” Saunders said and referenced an email received from a member of her organisation which stated:
“Over the last four prime ministers, the concessional contribution limit has gone from $50,000 to $25,000 and then back to $35,000. I have just heard now on the ABC news that there is a proposal to reduce to $11,000 the amount that can be contributed annually to super. This is a rule that will affect many — not just the 10 per cent of high-income earners that they are targeting. It is a real punch below the belt. I am a single female, 70 this year, still working a 76-hour fortnight to build up a meagre super balance to supplement my pension when I retire. I remain at work to keep a roof over my head. No access to an affordable house or health cards because of my income, which, yes, is being salary sacrificed at a high rate to my super, so that I will not be a drain on society. What a merry-go-round”.
