Legislating the objective of super
Welcome to Smart Private Wealth • Learning Centre • Insights
Welcome to Smart Private Wealth • Learning Centre • Insights
The proposed objective of superannuation released in recently released draft legislation is: ‘to preserve savings to deliver income for
a dignified retirement, alongside government support, in an equitable and sustainable way.’
The significance of legislating the objective of super is that any future legislated changes to the superannuation
system must be in line with this objective. It’s a fairly broad definition. For example, “equitable” seeks to address the distributional
impact of superannuation policy.
That is, latitude for the Government to target tax concessions to address differences in demographic factors and structural inequities
including intergenerational inequity and outcomes for different groups including women, First Nations Australians, vulnerable members
and low-income earners.
“Sustainable” encapsulates the changing needs of an ageing population including reducing the reliance on the Age Pension. The draft also
alludes to the viability of the cost of tax concessions used to incentivise Australians to save for retirement.
“Deliver income” appears to reinforce the concept that superannuation savings “should be drawn down to provide individuals with a source of
income during their retirement.”
More than 15 million Australians now have a superannuation account. Australia’s superannuation pool has grown from around $148 billion in
1992 to $3.5 trillion in 2023, and will continue to grow. Total superannuation balances as a proportion of GDP are projected to almost
double from 116% in 2022–23 to around 218% of GDP by 2062-63.
The consultation also recognises the value of the superannuation system as a source of capital, “which can support investment in
capacity-building areas of the economy where there is alignment between the best financial interests of members and national economic
priorities.”
At Smart Private Wealth we're here to ensure you're well prepared to live a lifestyle you love.
Our financial advisors can help to guide you through this process and ensure peace of mind when planning for the future – regardless of what stage in your working life you’re at.
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