More tax advantages urged for super

The Association of Superannuation Funds of Australia (ASFA) has used its submission to the Henry Review of Taxation to argue that virtually all Australians should be placed in a tax-advantaged position with respect to superannuation.

ASFA used its pre-Budget submission to the Government to outline the contents of its approach to the taxation review, and said all Australians should be covered by compulsory superannuation or provided with superannuation credits.

It said superannuation contributions are preserved until age 60 and that, on this basis, individuals should be compensated for their lack of access by being given a tax advantage on their superannuation contributions such that the rate of tax was lower than their marginal rate.

As well, ASFA claimed that, given the need to improve adequacy and reach a higher effective savings rate, additional contributions by individuals needed to be encouraged.

“To achieve this, individuals should be given a tax advantage on their superannuation contributions such that the rate of tax is lower than their marginal rate,” it said.

“All Australians should have equal ability to make tax-advantaged contributions to super,” ASFA said. “Where an individual’s employer does not offer salary sacrifice, other tax advantages should be offered so that the individual is not worse off.”