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.
A rally in the second half of the month helped global share markets generate solid gains in January, extending the rally from November and December.
Investing in property can be a lucrative venture, especially for small business owners looking to diversify their portfolio or secure a stable source of income.
As a small business owner or employee on wages, planning for your future includes managing your superannuation effectively.
An SMSF can invest in property development if trustees ensure the investment complies with the rules.
How will the proposed 30% tax on super earnings above $3m work?
Recent research shows why giving to others can provide us with a mental boost. We feel happier when we have a choice in how and who we give, and when we see the results of our generosity.