Financial Services and Superannuation Minister Bill Shorten has admitted the current level of concessional superannuation contribution caps is an issue that needs further government consideration.
Speaking at the 2011 Small Independent Superannuation Funds Association SMSF Forum, Shorten said the announcements made on the subject in this year’s budget were an indication the government was looking to address the situation.
“I’m alive to the issue, and in the last budget we certainly did something for people who change jobs and maybe had extra money paid by their old employer or their new employer and they passed the cap. We’re looking for an initial, first time it happened … $10,000 buffer so that it doesn’t get the penalty tax treatment,” he said.
“I do think it’s an area that more work needs to be done, but we haven’t got a settled position on it, but I still think it’s an issue.”
In response to these comments, opposition financial services spokesman Mathias Cormann said addressing the contributions caps was a priority for the coalition in the effort to ensure the adequacy of retirement savings of Australians.
“Our view would be that at some point in the future we would want to revisit concessional contributions caps and the level they should be at, rather than go down the path of increased compulsion,” Cormann said.
He said he was in favour of greater and fairer measures when it came to breaches of the contributions caps.
“At the risk of being simplistic, I take the view that if somebody makes an inadvertent error in relation to contribution caps, they should be able to correct that error. Anywhere else in the tax system if you demonstrably make an inadvertent error, you are able to correct that error,” he said.
“I know the government has made some attempt to somehow try and fix this, but I think to some degree they didn’t go far enough and what they’ve come up with is way more complicated than it should be.”
