Superannuation speculation worries bank customers
Sydney, 20 February, 2013: The Australian Bankers’ Association (ABA) said today that banks were receiving numerous inquiries from bank customers worried about their retirement security because of potential increases in taxation on superannuation.
Steven Münchenberg, Chief Executive of the ABA, said: “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.”
“Successive Governments have rightly urged Australians to save for their retirement. The current Government has said its previous superannuation reforms were directed towards increasing the savings and security Australians have in retirement. The proposals now being considered appear to reverse that approach. 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.”
“While the Prime Minister has ruled out mooted tax changes for withdrawals by those with higher balances, we recently saw media speculation that changes in the rules around self-managed superannuation are now being considered by the Government. Too many rule changes in superannuation undermine confidence in the system.”
With an ageing population and people expecting to live longer, it should be an overriding priority of any Government to encourage people to make provision for their retirement, rather than rely on future taxpayers to fund them. Constant change to the superannuation system and increased taxes that reduce retirement incomes create uncertainty and work against this objective.
Mr Münchenberg said: “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. Reducing the incentive to save for retirement will have the effect of increasing the Government’s pension bills 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.”
Customers who are worried about the impact of the potential tax increase on their financial security should contact their superannuation provider, bank or financial planner.
For further information:
Heather Wellard, ABA PR,
Phone: 02 8298 0411, Mobile: 0409 830 439 @austbankers
1. Private super in frame for tax hit” by David Crowe p1 “The Australian” 14/2/13