Australia Announce New Superannuation Roundtable

by Mary Swire, Tax-News.com, Hong Kong

07 February 2012

Australia’s government has announced a new Superannuation Roundtable to consider ideas raised at the recent Tax Forum to provide Australians with more options in retirement and to improve certain superannuation concessions.

The Australian superannuation system is based on a foundation of compulsory savings, supported by concessionary tax treatment, with the aim of ensuring that more Australians have adequate savings in retirement.

Reforms have already been implemented in an attempt to make superannuation concessions fairer for low-income earners and to improve the adequacy and equity of the retirement income system. Examples of these reforms include increasing the superannuation guarantee (the 9% compulsory contribution made by employers), introducing the low income superannuation contribution, abolishing the age limit on the superannuation guarantee, and providing Australians with access to low-cost funds through a scheme called MySuper.

At the recent Tax Forum there was further discussion about building on these reforms by giving retirees more options in the drawdown (or 'post-retirement') phase, and about better ways to target and more efficiently deliver current concessions. The Superannuation Roundtable will progress these ideas by bringing together representatives of the superannuation industry, small business, employees and the community sector, as well as technical experts and academics.

The work of the Roundtable will build on the significant superannuation reforms announced by the government as part of its 'Stronger, Fairer, Simpler' package of tax reforms.

These include progressively increasing the superannuation guarantee rate from 9% to 12% from July 1, 2013 to July 1, 2019; introducing a new low income superannuation contribution worth up to AUD500 a year from July 1, 2012, which will effectively refund the 15% contributions tax for individuals with income up to AUD37,000; introducing a AUD50,000 concessional contributions cap for individuals aged 50 and over who have less than AUD500,000 in superannuation from July 1, 2012, which is AUD25,000 more generous than the general cap of AUD25,000; and abolishing the 70 year age limit on the superannuation guarantee from July 1, 2013.

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