Super at the edge of abyss: ASFA
Thursday, 4 June 2009 10:35am
It's time to buck up as Australian's superannuation industry hovers at the edge of an abyss following the Federal Budget's cuts to super and a preliminary report of the Henry Tax Review, warned a key industry association.
Pauline Vamos, chief executive of the Association of Superannuation Funds of Australia, told the Rainmaker Marketing Symposium that there was an "enormous job for the industry in the next six months".
Vamos' comments followed the Budget changes which included reduced co-contribution changes and tax concession wind backs, along with a preliminary report of the Henry Tax Review which flagged the superannuation guarantee will not be increased from its 9 per cent.
"I don't think we can underestimate the combination of the Budget announcement and the first Henry Review report.
"I don't think we're at crossroads - [the super system] is at the edge of an abyss," she said.
Vamos along with representatives from the Australian Institute of Superannuation Trustees, the Investment and Financial Services Association and the Self-Managed Super Fund Professionals' Association of Australia agreed that there needs to be continuing discussions with politicians over the coming months about the Review before it was finalised.
"We will see a substantial shift in the whole industry and I don't think we can underestimate that," she said.
But while cuts to superannuation on tax concessions might be a sign of things to come for tighter super rules, a separate statement by Senator Nick Sherry, minister for superannuation and corporate law last month said that these changes will impact less than two per cent of fund members.
Senator Sherry also said that the co-contribution changes only take the scheme back to how it worked when it was first introduced. But recognising how the scheme is being used by high income couples, he said "while one in five that are eligible make co-contributions, 50,000 making co-contributions have spouses with incomes over $150,000."
Ruth Liew
