The Budget included measures announced in April, such as the 15 per cent tax on super earnings above $100,000 and the first stage of increased contributions caps, up to $35,000 for those aged 60 and over.
The Financial Planning Association (FPA) welcomed consistency around superannuation, however it opposed the lack of help to small business, saying financial planners would be placed under strain by increased regulatory obligations.
“The FPA strongly urged government to avoid tinkering with superannuation and we are happy to see Treasurer Swan has avoided changes that would reduce incentives and benefits of the superannuation system,” said Dante De Gori, general manager policy and standards at the FPA.
However, he added: “We are disappointed to see no announcement in support of small business across Australia. The financial planning profession has been and will continue to be under significant strain as a raft of new regulation comes into effect in 2013.
“These small financial planning businesses will receive no support from government with the implementation of Future of Financial Advice laws on 1 July. This is unfortunate, however we encourage all financial planners to use all the tools and support being provided to you through your professional association.”
In welcoming confirmation of superannuation changes proposed in April, Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos said ongoing speculation had been hurting community confidence in the sector but people would now be able to plan for their retirement with confidence.
She particularly welcomed the cap increase, as well as the previously flagged changes to the treatment of annuities, whereby they will now be provided the same concessional tax treatment earnings on superannuation assets as supporting retirement income streams receive, from 1 July 2014.
However, there are still further issues to be addressed, according to ASFA. Ms Vamos challenged policy makers to ensure they take a long-term, holistic view towards retirement income policy.
Institute of Actuaries chief executive Melinda Howes said the changes to the treatment of lifetime annuities would go a long way to addressing longevity risk.
“It was encouraging to see the Budget remove one of the key roadblocks to developing better post-retirement products by changing the tax laws on deferred lifetime annuities (which are essentially longevity insurance),” Ms Howes said.
