Industry groups support budget measures

More certainty for super

By Christine St Anne, Kate Kachor and Victoria Papandrea
Wed 12 May 2010

The government remains committed to superannuation as the preferred long-term savings vehicle, industry groups have said.

The government has continued its commitment to retirement savings following announcements made in its federal budget, industry groups have said.

The changes announced to superannuation in the government's response to the Henry review have been retained in the budget. These changes include the superannuation guarantee (SG) boost to 12 per cent, tax concessions for over 50 year-olds, and providing a rebate to low-income earners.

Treasurer Wayne Swan also announced that government body Infrastructure Australia will develop an appropriate pipeline of infrastructure investment projects for superannuation funds to invest in.

"This budget sets all Australians on the path for a much more comfortable retirement and recognises the key role that a healthy savings pool plays in strengthening our economy and providing much-needed funds for infrastructure investment," Australian Institute of Superannuation Trustees chief executive Fiona Reynolds said.

The Association of Superannuation Funds of Australia (ASFA) has said the government's commitment to its response to the Henry review has provided the superannuation industry with more certainty in particular areas.

"We're very pleased to see the confirmation of the government's response to the Henry review," ASFA chief executive Pauline Vamos said. 

"But what is very interesting is some of the detail, so a lot of that detail is providing industry with some certainty - certainty that we've been looking for in some areas for some time."

ASFA also welcomed the government's confirmation of the reduced income tax credit rate, which has been set at 75 per cent.

"We have been pushing for this for a long time, so we're very happy to see that," Vamos said.

ASFA also supported the government's decision to allow complying superannuation funds to include terminal medical condition benefits.

"The range of benefits that are deductible by complying superannuation funds to include terminal medical condition benefits is a fantastic initiative by the government. That will be good because it brings terminal medical condition benefits in line with death and TPD [total and permanent disablement]," Vamos said.

"Basically, there were a lot of other minor changes and it just means we've got some of those irritants fixed up."

The Association of Financial Advisers (AFA), however, was disappointed that the government did not make financial advice tax deductible.

"We stated in response to the Henry report last week, and it still remains an issue, that if you want to incentivise Australians to get advice you've got to provide some kind of tax incentive for that," AFA chief executive Richard Klipin said.

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