Solve super tax inequity, says Murray

On the subject of equity, the report stated that superannuation tax concessions were "not well targeted", with "a small minority of members" holding "a high proportion of superannuation assets."

The FPA has, in the past, released data confirming that those who seek advice do benefit financially from having done so. So, if the report is concerned that it's the minority who hold the high proportion of superannuation assets and to address this, logic suggests, that more should seek advice, why are the legislators making it so hard for the average individual to be able to afford to receive that advice?

At every turn, the costs to run an advice business is increasing, not to mention the added burden of red tape thrust upon us with absolutely no benefit to the client.

Varying tax scales being applied to member account balances; simple in description, far more complicated to implement, maintain and regulate. It seems contradictory to suggest these sort of changes, in the current climate of making Superannuation in Australia less expensive.

On the subject of equity, the report stated that superannuation tax concessions were "not well targeted", with "a small minority of members" holding "a high proportion of superannuation assets."

Does the bottom decile get 40% of the government aged pension support with the next decile getting the 20%?

The point of superannuation having concessional tax treatment is to encourage people to save for their retirement, and impose less of a burden on the government at retirement, for example in terms of requiring aged pension support. In its current form, the majority of superannuation benefits go to those people who need it least, and would have imposed little burden on the government in terms of pensions in any case. (Do the top quintile really need incentives to save for retirement? I'd suggest we don't.) Given that tax expenditures in the form of superannuation concessions are one of the biggest forms of "spending through the tax code" in Australia, and the level of tax expenditures in this form are nearing the level of pensions being paid, and will surpass them sometime soon, it seems inevitable that this will eventually happen.

I agree that advice can lead to people taking better advantage of the benefits from superannuation, and that is good for the individuals. But what is good for an individual in the context of what is currently in place is a different matter to what is good public policy.

Better targeting superannuation benefits might make it harder to demonstrate the value an adviser is giving to a client (pointing out two otherwise identical scenarios, one with additional super contributions versus one without), advisers will still be able to provide tremendous value to clients.