Moves To Clarify Objectives Of Superannuation Welcome And Necessary, But Not Sufficient

Leading seniors advocate, COTA Australia, today welcomed the Federal Government’s move to clearly identify the objectives of superannuation in legislation as recommended by the Financial Systems Inquiry.

However, COTA CE Ian Yates said he was disappointed that the Government would again progress changes in the retirement income space without commissioning a holistic review of the entire system.

“There is no doubt that superannuation is not always used for the purposes for which it was set up,” Mr Yates said.

“What should be a retirement income stream for people when they retire has, for many people on high incomes, become a wealth accumulation and tool due to generous tax concessions.

“This is a waste of taxpayer funds as the concessions don’t serve the purpose of encouraging retirement income and reducing the claims on the age pension.

“Enshrining the purpose of superannuation in legislation will assist policy makers to be clear when they are making decisions about issues like tax concessions and the tax and social security treatment of new retirement income products.

“However, as we have repeatedly said, looking at superannuation and its purpose without looking further to review how it interacts with the tax system, pensions, aged care and other retirement income arrangements will still result in piecemeal policy outcomes which will inevitably be dysfunctional for some and result in unintended outcomes.

“Such fragmented decision making is no doubt how we arrived at the situation we have today – where pensioners are being asked to tighten their belts while high income earners are increasing their wealth at the taxpayer’s expense.

“Again we call on the government to do this properly – commission an independent review of the whole retirement incomes space with input from all key stakeholders and advocates and seek bipartisan support for this from the Opposition and Greens, who we urge to support such a review.”

Media contact: Ian Yates 0418 835 439, Olivia Greentree 0439 411 774

COTA Australia is the peak policy development, advocacy and representation organisation for older Australians, representing COTAs in every State and Territory and through them over 500,000 older Australians.