Just days out from the Federal Budget, Chartered Accountants Australia and New Zealand superannuation leader, Tony Negline has advocated for key superannuation changes including removing the annual non-concessional contribution caps.
In an opinion piece to be published next week, Negline argues that removal of the annual non-concessional caps would enable people to invest their money in superannuation whenever they were able.
“Currently, there are annual caps on both the amount of concessional (before-tax) and non-concessional (after-tax) contributions that can be made into your super account,” he said. “The annual cap for non-concessional (after tax) contributions is $100,000 if your total super balance is less than $1.6 million.”
“$100,000 might seem like a lot, but there might be years every now and then when it is worth investing more than that sum, and at the moment you can’t,” Negline wrote.
He suggested that a fairer way for, for example, elderly people approaching retirement, or younger people on high incomes taking a career break that doesn’t break retirement plans, might be a lifetime contribution caps, to account for the various working patterns of Australians.
“To assume that every Australian will make constant contributions, at a constant rate throughout their working life, is just silly,” Negline wrote.
“The Government needs to remember that most people’s super contributions will only occur later in life, therefore a contribution cap needs to be set at a level that reflects this, not detracts from it.”