Government reveals budget super plan

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.”

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Written by Leon Della Bosca

Publisher of YourLifeChoices – Australia's most-trusted and longest-running retirement website. A trusted voice on Australia's retirement landscape, including retirement income and planning, government entitlements, lifestyle and news and information relevant to Australians over 50. Leon has worked in publishing for more than 25 years and is also a travel writer and editor, graphic designer and photographer.

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