Thursday, May 5, 2016

Federal Budget 2016 - more undermining of the superannuation system



The 2016 Federal Budget has again made changes to superannuation law.  For example it's proposed that the concessional contributions cap be reduced to $25,000 for everyone able to contribute to superannuation.  This constant changing of limits only undermines the general publics confidence in making contributions to superannuation.  If the general public can't be confident in the superannuation laws not being adversely changed over a one year period, why would they have the confidence to invest their money in superannuation for 10, 20, 30 years or more.  In addition retrospective changes are proposed to Transition to Retirement Pensions.  Where previously the investment earnings of these pensions were tax free, it is now proposed that this investment income be taxed at 15%, even for existing Transition to Retirement Pensions from 1 July 2017.  Again, how can people have confidence in the system and make long term investment decisions when superannuation has become a political football.  It's time for the politicians to provide confidence to the general public via ruling out any further adverse changes to superannuation rules.