Media release

Immediate release: 2012 Federal budget commentary

15 April 2019

Budget hits older worker’s ability to catch up on super

Older workers will have less opportunity to build their retirement savings and many other Australians could be left confused about their super following measures announced in the 2012-13 Budget, the Australian Institute of Superannuation Trustees said tonight.

Commenting on the Government's decision to delay by two years the introduction of higher concessional contributions caps for the over 50's with a super balance of less than $500,000, AIST CEO Ms Fiona Reynolds said this latest announced change to the concessional cap rules was the fourth since 2006.

"While these new measures will not affect everyone, there is no doubt that this constant tinkering with the super rules creates enormous uncertainty and could see more people give up on super and look to other forms of investment to save for retirement," Ms Reynolds.

"We need to remember that most older workers have only had the benefit of 9 percent compulsory super since 2002 and many have seen their retirement savings hit by the global financial crisis."

Ms Reynolds also noted that the new measures came at cost to future taxpayers."The Government may be saving now, but down the track more retirees will require higher Age Pension payments."

Ms Reynolds said older workers could be caught unaware of the changesand face harsh tax penalties. In addition, the tight timeline for the changes would put the industry under pressure to communicate the new concessional cap regime to members.

In another budget-boosting measure, the Government has confirmed a doubling of the super contribution tax rate for individuals earning more than $300,000.

"If the Government and the ATO can administer this new measure we don't see why it can't administer a higher cap for older workers with low balances," Ms Reynolds said.

On a positive note, Ms Reynolds welcomed the confirmation of Capital Gains Relief for merging super funds and the Budget allocation of significant levels of funding to ASIC, APRA and the ATO, including $467 million over seven years to implement the SuperStream reforms and funding to implement the vitally important financial advice reforms.

"It's important that these reforms are adequately funded however as some of this funding will occur by a levy on APRA-regulated funds, AIST will be consulting with the Government to ensure any levies are calculated on a fair and equitable basis for all super fund members."

Further media enquiries:
AIST CEO Fiona Reynolds: 0408 336 116 or Media Manager Janet de Silva 0448 000 499

AIST is the peak industry body for the $450 billion not-for-profit super sector which includes industry, corporate and public sector funds covering the super interests of nearly two-thirds of the Australian workforce.

© Copyright 2012 This summary is intended as information only and should not be used in the place of legal or other advice. AIST expressly disclaims all liability and responsibility to any person who relies in full, or in part, on any of the information contained in this summary, or is omitted from it. / AIST
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