Sydney, 6 September, 2006: The Australian Bankers’ Association (ABA) welcomes the Federal Government’s action to simplify and streamline Australia’s superannuation system.

The ABA has noted in its many submissions to Government and parliamentary committees that the superannuation system is too complex and there are not enough incentives to encourage Australians to save and plan early for their retirement.

David Bell, Chief Executive of the ABA, said: “These reforms will be important, not just for older Australians, but also to encourage younger Australians to save more in superannuation. This is crucial because a retirement savings gap still exists between the aspirations and expectations of Australians for their standard of living in retirement and what the current system will deliver.”

“The ABA supports removing benefits tax for Australians aged 60 and over who have already paid tax on their superannuation contributions and earnings.”

“We are also pleased to see that the Government has abolished reasonable benefits and age-based limits; and replaced these with annual contribution limits, which in effect establishes a lifetime cumulative limit for employees and for the self-employed.”

“Importantly, the contribution limits will be indexed to Average Weekly Ordinary Times Earnings. Not only will this ensure that the contribution limits remain in line with community expectations, but it will also ensure that people understand how much they can contribute to super. This is a good balance between concessionality and accessibility.”

“The ABA also supports changes to the assets test as an incentive for Australians to save and build wealth for retirement.”

“Reducing complexity and increasing flexibility will lead to greater confidence in our superannuation system. We believe these reforms will enhance Australia’s retirement income system, by encouraging higher voluntary superannuation, private savings and will improve Australians’ standard of living in retirement.”


For further information:

Heather Wellard
Director, Public Relations
Phone: 02 8298 0411
Mobile: 0409 830 439

ENDS