It appears the battle over retirees remains a political football Over the last few weeks one of the hottest political topics has been the refusal of the Federal Government to examine the tax benefits for wealthy superannuants. While Treasurer Joe Hockey was keen not to say ‘never-ever’ during his solo appearance on ABC’s Q&A, his boss has traditionally been much more firm in his thinking.

There are signs of a softening in position though, especially around the idea of tightening ‘loopholes’ (a broad and ephemeral concept if ever there was one). What it does do is keep super in the mix for the upcoming Tax White Paper, while allowing the Government to hold the line on not increasing taxes on what they define as ‘our money’.

 

 

Naturally, the superannuation industry is a little fired up as a result of this political positioning, and is beginning to lobby hard. Today, Industry Super Australia (ISA) CEO David Whitely has released a statement claiming that “New research shows almost half the population retiring in the years through to 2055 will not have enough income to achieve a comfortable retirement, unless current policies are overhauled.”

As expected, thing look even worse for underpaid and longer-living women - 63% of which are estimated to fall well short of where they need to be to secure a comfortable future.

 

 

The real kicker comes exactly where you might think. Based on ISA’s modelling, conducted by actuaries Rice Warner, the “analysis of retirement incomes shows current tax breaks flowing to the top 1% of Australian income earners will more than double their retirement income. Perversely, the lowest paid Australians, who receive no tax break, suffer a 14% reduction in their superannuation income.”

So, what does Isa propose to remedy this situation? Pretty much the same policies we’ve seen in the past:

·     Re-calibrating superannuation tax breaks

·     Raising the Super Guarantee to 12%

·     Re-instating the Low Income Superannuation Contribution.

However, the political will to implement these reforms seems a long way off.