No ‘adverse tax changes to super’ in budget

No changes, but there will be ‘necessary tinkering’.

Jane Hume

Coalition senator Jane Hume says the government will abide by its election promise, assuring Australians that there “will be no adverse changes to taxes in superannuation” at the next federal budget.

However, there will be “necessary tinkering” within the regulatory settings of super.

The senator’s statement sets many a mind at ease, after much speculation that the government may implement major changes to the taxation of super in the federal budget this year, as a result of its Retirement Income Review findings.

In the lead-up to the 2019 federal election, the Morrison government guaranteed Australians that it would not create new taxes on superannuation.

Many believed Mr Morrison was merely taking the opposite stance to Labor’s plans to scrap cash refunds on dividend imputation credits, implement changes to the Division 293 tax threshold and lower non-concessional contribution caps.

However, according to a Nest Egg report, following the economic fallout from COVID-19, finance and superannuation commentators predicted that the government may implement significant policy changes to the Age Pension system and taxation rate for superannuation as ways to mitigate the budget deficit.

Senator Hume said the government will not change taxes to super, but there will be “necessary tinkering within the regulatory settings for superannuation”.

“This does not necessarily mean instability and uncertainty for members. It simply means that our superannuation funds are held to the highest standards of accountability and transparency,” she said.

She reiterated that the government will delay introducing legislation affecting the retirement income framework.

“Instead, the government will give effect to a principles-based retirement income covenant for consultation with the industry at a later date,” she stated.

“I’d like to see trustees ensure that members have more options to draw down on their retirement savings in order to maximise their living standards in retirement.”

Are you pleased that super taxes will remain as they are?

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    COMMENTS

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    older&wiser
    16th Sep 2020
    10:20am
    Here we go again! What do they mean by 'tinkering'? So sick and bloody tired of constant changes that don't affect them.
    libsareliars
    16th Sep 2020
    11:56am
    I agree older&wiser, I don't trust them one little bit, to do anything in the best interest of ordinary Australians.
    Tom
    16th Sep 2020
    2:37pm
    I agree older&wiser, I don't trust Labor one little bit, to do anything in the best interest of ordinary Australians.
    As Bowen said, if you don't like their changes, don't vote for them. Bowen's hubris is the gift that keeps on giving.
    On the Ball
    16th Sep 2020
    8:31pm
    Sorry Tom. Labor isn't in power. Its the LNP that propose some "tinkering".
    Chooky
    17th Sep 2020
    3:34pm
    Well Tom, given Labor are NOT in power your mistrust should be steered in the right direction. It’s LNP then you do not trust.
    wogaroo
    16th Sep 2020
    10:29am
    older & wiser, i am completely in agreement with you. Why cant they come straight out and tell us what they are going to do!! "Tinkering" Pollie talk that worries me..
    Rosret
    16th Sep 2020
    10:30am
    With a $400billion debt for COVID I am most concerned about the devaluation of Super. Its pointless spending all this money to save the oldies if the oldies have no money to live on. Please can the Premiers open the borders and get our children back to work.
    Sundays
    16th Sep 2020
    2:42pm
    Some industries are still doing well. Look at the increase in online shopping, hard to find.a tradesman, holiday accommodation in parts of regional Qld say they are fully booked until Xmas. A free for all would be a lot worse for the economy
    Waiting to retire at 70
    16th Sep 2020
    10:32am
    In the words of Jane Austern:

    It's not what you SAY or THINK that defines you but what you DO.

    The LNP's history of past superannuation "tinkering" demonstrate they will ONLY damage the superannuation of current and future superannuants.

    Remember there is one rule for us and another rule for them (of course).
    "Current Contribution Rates (from our taxes) for Senators and Members: 11 1/2 per cent of Annual Allowance" NB "Allowance" doesn't just include salary.

    The rest of Australia?
    Still stuck on 9% and they have been, YET AGAIN, saying that industry still can't possibly afford the overdue 1/2% increase. Originally, we would have been on a 12% contribution over a decade ago except for delays introduced by the LNP for years with the same lame excuse about affordability during the last 28 years of growth in the Australian economy. Defies logic.
    Alan
    16th Sep 2020
    12:08pm
    Iwould have no problems if the compulsory super contribution was set at 12% provided that there was an efficient means to stop people once they retire from blowing their supperannuation of a luxury world trip or some other expenditure, for example,buying a Mcmansion and luxury car and then lining up for the age pension because they are now poor enough to qualify.
    Fliss
    16th Sep 2020
    12:52pm
    Have got to disagree with you entirely "Waiting to retire". You say "stuck on 9%". Of course industry can not afford the extra 1/2% increase. Many many small businesses are battling to pay 9%. If you want more in your super then salary sacrifice. Your super is YOUR responsibility not your employers.
    ex PS
    16th Sep 2020
    5:18pm
    Alan, why do you think you have the right to tell people how to spend THEIR money?
    The government itself has linked Super increases to wage raises by insinuating that the Super increase will impact on them. This means that the money retirees get from Super is theirs to do with what they want. If you get a pay rise and put that money in the bank untill your retirement, are you happy with the government telling you how you can spend it?
    Super is an individuals money that has been invested on their behalf, it is often paid in lieu of pay rises, it belongs to the people who own the account that it is transfered to.
    This government wants people to be dependant upon OAP's, that way they can control the way the money is managed. Self Funded Retirees are just too hard for them to control.
    sunnyOz
    16th Sep 2020
    7:04pm
    Oops 'Waitingtoretire' & 'Fliss' - the current SGC rate is 9.5% - NOT 9%. Has been since July 1st, 2014. It is still slated to begin with an increase from 9.5 per cent to 10 per cent on 1 July 2021 and rising to 12% by 2024.
    Anonymous
    17th Sep 2020
    6:37am
    Increasing the SGC will do nothing for most workers, who will merely sacrifice age pension income because they have more savings - and will lose out on wage increases because employers simply cannot pay both extra super and higher wages. Increasing the SGC will be a huge gift to the well off, with their excessively generous tax concessions that are costing the nation more than the total cost of the OAP. It's time average Aussie's woke up to the massive superannuation scam and stopped ranting about extra contributions, but instead demanded the tax concession system be fixed.
    Sundays
    17th Sep 2020
    7:08am
    For many compulsory super has been the only savings they have, andbhhas made a difference to their retirement
    Baby Huey
    16th Sep 2020
    10:33am
    Governments of all persuasions love playing with other peoples money. Time for cash and gold bars under the bed. I bet they will not even ask us to bend over before the screw us out our money again.
    ex PS
    17th Sep 2020
    9:55am
    That's the problem with governments, they are allways dealing with other peoples money. If itcwas their own they wouldn't waste it on electioneering and badly constructed projects.
    Priscilla
    16th Sep 2020
    10:40am
    State governments will not let people go back to work to get the economy back on track and also to save peoples' livelihoods, homes etc., but they will allow the AFL to play and actors to enter the country so they can work and help the economy. Unbelievable! If it is good for the AFL and overseas, interstate actors etc., to work to help the economy, why not everyone? It is not just double standards but doesn't make sense when only some are allowed back to work and others are denied the right. People can still work if they practice good hygiene, distancing and wearing masks. Got to happen soon or there will be no economy at all.
    The Sheriff
    16th Sep 2020
    10:51am
    Priscilla, You nailed it!
    Lookfar
    16th Sep 2020
    11:11am
    It is all a question of fine tuning Priscilla, the big money movement events can happen with very little risk but everyone doing it would just start another wave.

    Not so sure the economy is in much trouble, - it is almost impossible to get a builder or other trady at the moment, every body is so busy they are suffering stress because not enough time to meet demand.
    A lot of industries work from home as well, I think the essential parts of our economy are in good shape.
    Tanker
    16th Sep 2020
    11:31am
    One small point and that is it was the Federal Governments decision to allow actors to come in from overseas. I agree about the AFL. NRL and cricket players to cross borders.
    Waiting to retire at 70
    16th Sep 2020
    12:06pm
    I think the frustration is understandable but I think we sometimes assume that "everyone" will follow the rules.

    Unfortunately that wasn't, isn't and likely, will never be the case in this country (as elsewhere). True, some of your AFL and NRL 'exemptees' have broken the rules of their exemptions, but in most cases they have been penalised. It is easier to monitor them, as a group, because we know (at all times) where they should be. Can't say that for the rest of us without deploying all members of our 28,000 defense forces.

    With South Australia having opened up to ACT and likely to do so with NSW (when they have a 14-day period with no unknown source infections) your/our desired "help the economy" is underway. SA is discussing with Qld to see if they are prepared to reduce their 28 day non-unknown source infections, there is hope that Qld can open to SA/NSW/TAS/NT/WA/ACT. Then, Vic will have to achieve the same goal. Only problem is that the Chief Ministers/Premiers are having to do the negotiation as the Prime Minister, the Minister for Health, The Treasurer and the Minister for Finance ONLY WISH TO SCORE POLITICAL POINTS. Your health, my health and everyone's health is more important then that.

    Opening up too early, against HEALTH advice, will only see a more devastating impact on the economy when we would have to inevitably go back into a full lockdown when the virus spreads again. With everyone starting from the same start point (14 straight days without a non-traceable infection) together we have the best chance to manage things until we have a workable vaccine. That's the commUNITY we needed to manage things going forward.

    In such times we shouldn't be turning ON each other but rather TO each other.
    KSS
    16th Sep 2020
    12:29pm
    Waiting to retire, you are so wrong with your comments "Only problem is that the Chief Ministers/Premiers are having to do the negotiation as the Prime Minister, the Minister for Health, The Treasurer and the Minister for Finance ONLY WISH TO SCORE POLITICAL POINTS".

    The Federal Government has NO jurisdiction over the states.

    If anyone is playing politics it the the Premieres of the (closed) states with QLD in particular far more focussed on her re-election next month and playing to the peanut gallery than addressing any possible health issue that might have been caused by allowing the pregnant woman to get emergency treatment that may have saved her child, the four kids under 13 to visit their dying father, the nurse from ACT (who have had no cases for over 2 months) to visit her dying father or attend his funeral. And that does not even consider the cross-border town (which has never had a single case of COVID-19) who are not allowed to cross state lines to the nearest supermarket after their own burned down resulting in a 150k one way trip to the next nearest shop.

    I agree opening up too early may result in a third wave of infections, BUT the response could be far more nuanced than it is at the moment even in Victoria.
    Fliss
    16th Sep 2020
    12:55pm
    Yep! Agree KSS.
    Sundays
    16th Sep 2020
    2:30pm
    KSS no one mentions the other States with closed borders and same restrictions. The beat up on Qld is purely political. The dying father hadnt been in contact with is children for 4 years and had chosen not to pay child support. We can see what happems in Victoria.and oversead when borders are opened too soon
    ex PS
    16th Sep 2020
    5:23pm
    As a Queenslander, I want a Premier who is looking after my interests, not SCOMO,s and not multimedia magnates who don't even live in this country.
    If we open our borders too soon, we face the prospect of starting all over again. This certainly will destroy the economy.
    inextratime
    16th Sep 2020
    11:03am
    When will we get rid of State Governments ? Set up at the turn of last century, the world has changed. Communications no longer a problem. Want to save massive amounts of money ? Expand local councils, marginally increase fed nu8mbers and scrap state governments before they send us totally broke. This pandemic should have been handled completely at federal level. The duplication of services by the highly paid state pollies and all their consultancy mates in a country with a population of 25m is hideous.
    Lookfar
    16th Sep 2020
    11:24am
    inextratime, the State Govenments are the ones handling the pandemic, and are handling it effectively and supported by the majority of the people, - Morrison would have been just as stupid as Trump, - witness the way he took Trumps line of attacking China, - has that worked out well for Australia?

    Morrison gives lip service to rebuilding Australia's manufacturing base, but so far only the States are doing anything about it, the Federal Govt, - particularly the Liberal party, has consciously and deliberately destroyed Australia's manufacturing industry so that it is now almost impossible to buy genuine "Australian Made".

    This was at the behest of their American masters yet they blamed it all on the unions, - who have to accept some blame, but not the majority.

    You may reflect on the total reliance of Australia on imports, and the poor future of our youth for employment, but what does one call a government that destroys their own economy, - what do you call someone who opens the city gates to the invaders?
    Tarzan
    16th Sep 2020
    11:32am
    Cant happen fast enough, bulging bureaucracy's, no responsibility for debt, spend, spend, spend.
    libsareliars
    16th Sep 2020
    11:58am
    I'd rather get rid of the Federal Government that we have at the moment, it's the state governments looking after us, not Scotty from marketing.
    Rae
    16th Sep 2020
    12:05pm
    No get rid of the Federal Government. Put a COAG team in place instead,

    Get the Party out of local Government by appointing public administrators not attached to the Property Council in charge,.

    The States do a good job running education, health while all the Feds do is pour more immigrants in to destroy capacity, year after year.
    KSS
    16th Sep 2020
    12:31pm
    Yes Rae because COAG worked so well right? The place where issues were taken that you didn't want to act on because they would never agree to anything.
    inextratime
    16th Sep 2020
    3:20pm
    I did not mention which Political party should run the country and if you think the states have done a good job of handling the pandemic, talk to the hundreds of thousands that are now out of work. The real cost of the State's management of this pandemic will not be totally realised for a year or two yet and the States know it. But don't let political propaganda get in the way of the facts.
    Pass the Ductape
    16th Sep 2020
    11:36am
    The definition of 'tinkering' by government when it comes to super...simply means more for them - less for you!
    panos
    16th Sep 2020
    12:52pm
    Oh the beauty of your statement !!
    Stone the Crows
    16th Sep 2020
    11:46am
    Tinker Tinker Tinker That's all they ever do .They haven't the guts to to consult, implement properly work it out . Can Never see the big picture And. it will probably never affect them .scared of losing votes .or they just haven't a clue what they are doing
    panos
    16th Sep 2020
    12:51pm
    Hang on is it not the case they just spent a fortune of our money on a total review and tinker is all they came up with.

    What a waste of money
    Buggsie
    16th Sep 2020
    11:48am
    Wonder if "tinkering" means another attack on the only super funds worth having - industry super funds. After all, they are outside of the old boys network that runs this country - media, governments of all persuasions, highly paid chairmen and board members, CEO's - and are influencing how big business should be run for the benefit of consumers, not for the good old boys or wealthy shareholders. Cynical? Yes! Realistic, also Yes!
    london
    16th Sep 2020
    12:23pm
    The government should review the deeming rates
    Mariner
    16th Sep 2020
    2:10pm
    Deeming rates should be abolished for the time being. Got 1.2% for a term deposit over 6 months, due on Nov 13; maybe 0.5% then. Forget the deeming, just let us be and bring it back when we get our 7% again.
    Taragosun
    16th Sep 2020
    4:12pm
    Mariner, we are members of National Seniors Australia (not much to join). They are associated with Auswide Bank (old Bundaberg Building Society) and the rates you can get as a member are quite good (given the current situation). We have two quite large term deposits with them and the interest rates above most of the Banks, etc.
    Jim
    16th Sep 2020
    7:04pm
    Taragosun, is the rate you mention available to anyone or is there some special deal involving National Seniors Australia, I have just checked their rates and they are much the same as most banks, but if there is some special deal available I would be very interested in joining. NSA
    Mariner
    17th Sep 2020
    7:26am
    Just wish a financial institution would offer us the deeming rate, nothing more. That way we don't actually lose out. As it is mattress banking seems to be a better option.
    Mark
    16th Sep 2020
    1:16pm
    Looking at retirement more broadly, I think it’s time to scrap the age pension. If you are able to work then you should be working. If your health prohibits you from working then the disability pension would still be available. The money saved from providing an age pension would be directed to citizens for them to spend at their discretion. Spend up and have a good time till you are no longer able to work or be more frugal and save for an earlier exit from the workforce.
    No more rules, no more spending up to meet some arbitrary cutoff to get an aged pension, no more huge welfare bureaucracy to pay for.
    Obviously this would be brought in in many years time to allow people to prepare.
    ex PS
    16th Sep 2020
    5:30pm
    By many years time, I assume you mean after you've got yours.
    floss
    16th Sep 2020
    2:09pm
    HAS THIS EXCUSE FOR A GOVERNMENT made super so unattractive it just not worth having so lets all go on the pension and see what happens ,disaster I think.
    Rae
    16th Sep 2020
    2:49pm
    People are waking up floss. They aren't saving extra into super now and they took it out when given the chance. Nobody wants annuities or income streams anymore.

    I think Super is pretty much dead but hasn't yet been buried.

    Deeming non concessional amounts as 10% only pretty much frightened all the punters.
    Anonymous
    17th Sep 2020
    6:43am
    Still way too much ignorance and misunderstanding out there, Rae. People are ranting about wanting the SGC increased, but just don't get it that it will benefit the well off and do little or nothing for battlers and many of the even the middle class.

    My kids don't want money in their super account, because they've seen how the system works. I struggle to try to get a decent income from investments and pay more for everything after having gone without all my life to save, and my neighbours - who gave millions to their kids at age 60 - party on the full OAP with a $1.5 mil house, 2 brand new luxury SUVs, all the pensioner concessions and benefits, and their kids paying all their bills out of the millions they received. Why would anyone want a few more thousands in super?
    Tom
    16th Sep 2020
    2:31pm
    Face it, your money and savings is irresistible to Labor. That's why Bowen and Shorten lost the unlosable election.
    Rae
    16th Sep 2020
    2:51pm
    They are mumbling about land taxes and estate taxes and other things that frighten all but the sufferers of adversity and the spendthrifts hoping for more free stuff.
    Jocky
    16th Sep 2020
    9:36pm
    Why are you bangiing on about Labor? They're not in power, the coalition are, and it's THEIR retirement income review (on the recommendation of the Productivity Commission).
    mIKER
    16th Sep 2020
    3:26pm
    The LNP, but in particular the current Federal Government, has done everything possible to scare people about superannuation. Not, of course, the Super held in the Retail sector who are their big donors and mates, only the super held in Industry Funds, jointly run by both industry and those bogeymen the unions.
    All because the Industry Funds have far better returns and charge much lower fees. Oh, how unfair of them.
    Super has been of great benefit to many workers, giving them financial security and a far better income in retirement. It has also saved billions in OAP payments, meaning the money can go to health, education, etc.
    For workers on the lowest pay scales, it doesn't work that well, because they are always going to be dependent on the OAP and any money they have is likely better spent on the necessities of life. However, it would be unfair not to give them the opportunity to save something for their old age and get it tax free.
    The crazy thing is that the attacks by the LNP on super are self-defeating because they deter workers from the whole super concept, including for their pals in the Banks!! So Politicians leave the whole thing alone, you're already getting a lot more than you deserve, leave some cake for the rest of us please!
    Cheezil61
    16th Sep 2020
    4:40pm
    I just don't trust them! There's always someone wanting to get their hands on working people's money it seems! If only we had the choice to take it somewhere else right now! We were forced to have super & the idea is good if it were used properly & fairly!
    Alan
    16th Sep 2020
    5:00pm
    Please do not change supernnuation rules except to make it harder for people when they turn pension age to blow their super on expensive international holidays, upgrading to a McMansionand buying luxury cars so that they can then become asset/experience rich but cash flow poor and qualify for a pension. Pensions should be reserved for those who haven't had the luxury of accumulating a significant lump sum super amount and are unable to widely provide for themselves. Spending your super amount to qualify for a pension is poor use of your money and you should not e rewarded by being given a pension when you have been a spendthift in the early stages of retirement.
    kram
    17th Sep 2020
    11:05am
    But is alright for those who have been spendthrifts throughout their working life.

    Not only has your pension not been reduced due to Covid, but the Govt has given you handouts, though I'm not sure why, as OAPs do not lose their jobs. Covid, on the other hand, has greatly affected those who are unable to get the OAP with many having less to live on than those on the Govt teat, due to the colapse of share dividends.
    cupoftea
    16th Sep 2020
    5:28pm
    Leave my fk super alone
    ex PS
    16th Sep 2020
    5:33pm
    Well put. It is our Super not some sticky fingered politician.
    floss
    16th Sep 2020
    7:23pm
    Good one Buggsie carefully you don' t get attacked by the greed is good gang that seem to hate Industry Super Funds.Ease it up Mariner you lack of brains is showing ,selling daughters etc. you have a problem.

    17th Sep 2020
    6:45am
    No, I'm not pleased. I know it was wishful thinking, but I was hoping for a sensible overhaul of the superannuation tax system and retirement income tax system and the abolition of aged pension means tests, to make the system actually work for those who plan and save and stop the excessive handouts to the wealthy who don't need tax concessions to build a retirement nest egg.
    P$cript
    17th Sep 2020
    5:31pm
    The couldn't destroy the industry superannuation through the royal commission, instead it revealed that their mates in the retail superannuation fund were corrupt.
    Now they are trying to destroy superannuation through the backdoor.
    Kingy
    29th Sep 2020
    12:24pm
    Seriously, not one sensible comment on this page. I would have to wonder if this is run by GetUp and ALP.


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