Industry Super Australia (ISA) has renewed its call for a rebalancing of superannuation tax concessions and warned the Government against pursuing short-term Budget savings.
Delivering a supplementary submission to the Government's Tax Review, the ISA urged measures specifically aimed at assisting both the young and lower income earners.
In doing so it, said the tax system needed to be recalibrated by "shifting billions in tax breaks from the top income earners to those on lower income rungs to help them achieve a better retirement and ease the call on the age pension".
ISA chief executive, David Whiteley, said the current tax review process represented a golden opportunity to set the system up for the future but warned it shouldn't be a quest for short term budget savings.
"There is the capacity to make the system worse unless changes are carefully thought through," he said. "In particular it is vital that tax concessions are rebalanced rather than booked for short term budget savings and recent changes to the age pension asset test are tempered so incentives are coherent."
Whiteley said the system had to deliver on community expectations of a better retirement — and if it did not, there would be inevitable pressure for the age pension to be lifted.
ISA's proposals contained in its supplementary submission to the tax review include:
Financial advice is having a significant impact on how Australians are engaging with the more complex aspects of their superannuation, new findings have shown.
While the Financial Advice Association Australia said it supports a performance testing regime “in principle”, it holds reservations about expanding this scope to retirement products.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
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