Federal Budget: Industry responds

The 2019-20 Federal Budget's subdued approach has received a similar welcome from the wealth industry.

The big players are neither up in arms nor full of praise for the Budget, which was headlined by personal tax cuts and a $7.1 billion surplus - Australia's first in 12 years.

Industry Super Australia said the changes to voluntary superannuation contributions for those who have retired (or are on the cusp of doing so) were welcome and "generous," but criticised the Government for bypassing the opportunity to improve the universality of super, noting women receive on average 40% less super than men.

"If this measure proceeds there would be some justification to focus benefits to those with inadequate super savings," ISA deputy chief executive Matthew Linden said.

"Sadly, the Budget again misses an opportunity to take action on the millions of Australians missing out on super entitlements - particularly women and younger workers.

"The Government could have made these issues a priority by paying super on parental leave, and abolishing the $450 per month super threshold."

The Financial Planning Association of Australia remarked that the budget was "balanced" and one "for all Australians."

The FPA noted the Budget's tax cuts would have a positive impact on the financial health of many Australians, which it was pleased about. However, chief executive Dante De Gori said the need still remains for a Low Income Superannuation Contribution Scheme.

"Australians on lower incomes continue to find it hard to save for their retirement," De Gori said.

"We would have liked to see this budget address the need for a Low Income Superannuation Contribution Scheme in addition to the tax concessions, to boost retirement saving potential and in turn, reduce future pressure on the age pension and support better financial futures for all Australians."

The Australian Institute of Superannuation Trustees were more critical of the Government however, maintaining the voluntary super contribution changes would not have much of an impact on the retirement outcomes of most Australians.

AIST chief executive Eva Scheerlinck said only a small portion of older workers could afford to make voluntary contributions to their super, and added having the means to pour $300,000 into their super fund in a single year was a "dream" for most ordinary working Australians.

"The vast majority of members of profit-to-member superannuation funds will not benefit from these changes," Scheerlinck said.

Scheerlinck also joined ISA and the FPA in calling the Budget a missed opportunity to improve the retirement outcomes for low income workers and women.

De Gori also said that while the association "broadly" supports the Government's $606.7 million response to the Royal Commission, the fact most of that amount will be recovered from ASIC's industry funding model will add to the cost of advice.

"We believe implementing the Royal Commission recommendations is necessary for the protection of consumers, but are concerned by how much it will cost," he said.

Meanwhile, SMSF Association chief executive John Maroney praised the Government's light approach to super in this year's Budget.

"Many SMSF trustees and their advisers are still experiencing the compliance impacts of the 2016 Budget changes that began on 1 July 2017, so the fact there are no more major changes in the pipeline is extremely positive," Maroney said.

He also welcomed the Government's increase of the work test age - despite the work test not being removed entirely as the SMSFA suggested - noting the association's policy position was to support greater flexibility for making contributions to superannuation.

"Although we suggested that the Government should remove the work test altogether in our Budget submission, this measure is a step in the right direction," he said.

The Governance Institute was pleased with the increased funding for ASIC and APRA, and said pushes from both the Government and the Opposition on governance matters were "good to see."

"By boosting ASIC and APRA's ability to perform their functions more effectively, it sends a strong, and positive message about fairness," chief executive Megan Motto said.

Actuaries Institute president Nicolette Rubinsztein said an absence of any material changes to superannuation policy was welcome after years of major modifications.

Rubinsztein said the drag of age pension expenditure - which is forecast to grow by 17% over the four years to 2022-23 - was tempered by tighter means-testing, but noted aged care costs would still strongly grow as the population ages.

Read more: SuperannuationASICFederal BudgetAPRAFPAGovernanceISARoyal CommissionIndustry Super Australia
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