The outcome of the 2010 Federal Election has the potential to significantly alter the superannuation system. With only 10 days to go, ASFA – the Voice of Super, says all Australians need certainty about the future of their super.
“It is a matter of certainty and security. Australians deserve to know what will be the superannuation policies of any future government,” says ASFA chief executive, Pauline Vamos.
Policy makers need to be aware of the following key facts:
- Superannuation is a vital part of the Australian economy. The super industry is the single largest institutional investor and research carried out for ASFA shows that it helped Australia avoid recession during the global financial crisis.
- It’s estimated that compulsory superannuation has increased national savings by 1.5-2 percent of GDP each year. Without superannuation, ASFA research indicates that investment would be running at around $14 billion or more lower each year.
- Superannuation is not just paramount to the overall prosperity of Australia, it is fundamental to delivering a better standard of living in retirement for working Australians.
- A recent independent poll showed more than two-thirds of Australians want an increase in the Superannuation Guarantee and ASFA research shows that having enough money in retirement is one of the biggest concerns for working Australians, above issues such as mortgage payments, job loss, and health care expenses.
- The current prospective level of retirement incomes in Australia is low by international standards. Research indicates a massive $695 billion gap between current retirement savings and what is needed to deliver the minimum adequate level of incomes in retirement.
- For a couple to be able to afford private health insurance and to be largely self sufficient in retirement, with minimal reliance on the Age Pension and other government measures, they need to be able to spend around $51,700 a year. This requires retirement savings in the order of $500,000 in today’s dollars. Nine percent SG is not sufficient to generate this for the average worker.
- ASFA commissioned research clearly shows that low and middle-income families are more than $100,000 better off with super than without it.
- Concessional taxation of superannuation is not a budget liability. ASFA commissioned research demonstrates that superannuation generates more than $15 billion a year in taxation revenues and reduced expenditure on the Age Pension.
”We call on the opposition to release a comprehensive superannuation policy,” Ms Vamos said. “With only days remaining in this campaign we urge the Opposition and Government to support:
- An increase in the superannuation guarantee to 12 percent
- Removal of the $450 threshold for SG payments that particularly disadvantages women
- An increase in contribution caps so that Australians can ‘catch up’ on their super when they can afford to do so
- Provision of a tax rebate or other form of assistance to make employer superannuation contributions more tax effective for low-income earners
- Inclusion of the self employed within the compulsory system.
The Association of Superannuation Funds of Australia (ASFA) is the peak industry body for the entire superannuation sector. It is the only industry body that represents all types of superannuation funds, service providers and fund members.
For further information, please contact:
Michelle Dunner, GM Marketing and Communications, ASFA, (0412) 704 016
Sarah O’Grady, Communications Co-ordinator, ASFA, (0410) 439 966