Government unclear on changes to superannuation

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Government, no changes to superannuation, review of retirement incomeThe Government is having some difficulty running its line of ‘no changes to superannuation in this term’ and ‘no plans for future changes’, particularly relating to superannuation pension draw downs and a review of retirement income.

In question time this week the opposition asked “will the government be changing the draw-down or preservation age rules governing superannuation?”

The Treasurer responded “we absolutely have no plans to change super. We honour our commitment in relation to superannuation and we think it is vitally important, during a period when people are actually getting comparatively low returns on their investments, that they have stability and certainty in relation to superannuation.”

This is despite a Treasury consultation on reforming superannuation pension regulations, following from a pre-election promise to “conduct a review of the minimum payment levels to assess their adequacy and appropriateness.”

The Treasurer has also reopened the question of a review of retirement incomes, after saying there would be no such review shortly after the release of the budget.

Mr Hockey said, on the ABC Q&A program, “at some point, and now is not the time, and it wont be for a while, but at some point we’ve got to look at the future of the entire retirement income system.”

Hockey said this was “no different” from what Tony Abbott has been saying.

Referring to superannuation Mr Hockey said “we are not changing it this term, we have no plans at all to change it in the future.”

Meanwhile the Minister for Social Services Scott Morrison has been telling people that superannuation is there to provide income in retirement.

“Tax incentives for superannuation are provided so people can build up their superannuation and they can draw down on it in their retirement.  It’s not there as an inheritance programme; it’s not there as a wealth transfer programme,” he said.

Prime Minister Tony Abbott told the Parliament:

This government made a commitment prior to the election that there would be no adverse changes to superannuation in this term of parliament—and that is exactly the commitment that we are keeping. Let me go on, this government has no plans to change the taxation of superannuation in the future beyond this term of parliament and this government will never treat the savings of Australians as a piggybank to be raided by the government whenever the government is in trouble.

The Government appears to be trying hard to make, in the words of the Prime Minister, a “very clear distinction between the Labor Party and the Coalition.” However there are difficulties in reconciling this with pre-election promises and the reform process, including the Tax White Paper.

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