Today Show host Karl Stefanovic has slammed Labor’s plan to legislate a purpose for superannuation, arguing ‘it doesn’t make any sense’.
The federal government has announced a review into retirement savings, with Treasurer Jim Chalmers also hinting at winding back generous concessional tax rates for super contributions that cost the budget more than $50billion a year.
A Treasury consultation paper released this week also suggested super funds could invest ‘where there is alignment between the best financial interests of members and national economic priorities’.
The Australian Financial Review’s economics editor John Kehoe suggested Dr Chalmers was trying to ‘nudge’ super funds into investing in social causes like housing and green energy.
‘Chalmers is saying, look I’m not saying you have to take sub-optimal returns, but if these returns stack-up financially, you should go and do it.
‘So it’s more of a gentle nudge rather than forcing the funds to do it.’
A fired-up Stefanovic questioned the purpose of that.
‘Can I just say this Johnny, it’s our money,’ he said.
‘It’s our money in a super fund, and maybe I’m silly. I would just want the best return.
Karl Stefanovic (left) has slammed a government plan that could see Australian’s superannuation returns cut short, saying the move ‘doesn’t make any sense’
Mr Kehoe responded, saying: ‘The only way that these social investments are going to stack up, is perhaps if the government provides a subsidy or some other red tape reduction,’ he said.
‘I can’t see many of the super funds doing this unless the financial returns actually stack up.’
Stefanovic replied: ‘It doesn’t make any sense economically, or fiscally from my point of view.’
Dr Chalmers has this week also suggested winding back the flat 15 per cent concessional tax rate for Australians depositing up to $27,500 a year into the super.
The Australia Institute, a left-wing think tank, calculated the $52.6billion annual cost was almost as much as the $55.3billion spent on the aged pension.
‘Right now, we’re on track to spend more on super tax concessions than the age pension by around 2050,’ Dr Chalmers said.
‘I’m not convinced that’s a sustainable way to get to our destination – good retirement incomes for more Australians, now and into the future.’
Treasurer Jim Chalmers (pictured) has flagged a shake-up to Australia’s superannuation system, including new laws to prevent Aussies from accessing their super early
Queensland Nationals senator Matt Canavan, a former economist, said Labor’s plan could stifle super returns.
‘It is our money. Just leave our money alone,’ he told the Today Show on Wednesday.
‘This is shaping up as a massive broken promise if they proceed with this. The Labor Party said before the last election they wouldn’t touch our super or tinker with it.
‘People work hard for this money. At a time when they are struggling to pay their bills today, the Labor Party seems dead-set on making it harder for people tomorrow.
‘This money is there for you to help you in your retirement.’
Labor is planning to tighten the rules on accessing super early, which would make it harder for those born after July 1, 1964 to touch it before they turn 60.
Former treasurer Josh Frydenberg allowed Australians to withdraw up to $20,000 from their super funds during the Covid-19 pandemic.
Australians could choose to access their super via two $10,000 instalments during the early months of 2020.
Outside of the pandemic, early release super is only allowed in very limited circumstances, including if someone is permanently incapacitated, is dying, is facing severe financial hardship or has a severe physical or mental impairment that stops them from working.
Queensland Nationals senator Matt Canavan, a former economist, said Labor’s plan could stifle super returns.
The federal government has announced a review into retirement savings with Labor also hinting at winding back generous concessional tax rates for super contributions that cost the budget more than $50billion a year (pictured is Prime Minister Anthony Albanese with his girlfriend Jodie Haydon)
Dr Chalmers called the early release a ‘debacle’ that ‘forced’ Australians ‘to choose between better incomes in retirement or paying their bills’ after $36billion was withdrawn.
Labor’s shake-up could see an end to Australians being able to plunge up to $27,500 into their super each financial year at a low rate of 15 per cent, if they earn up to $250,000.
Shadow treasurer Angus Taylor said any change to super would be a breach of an election promise when asked if the tax concessions were fair and sustainable.
‘What we do know is they made a very clear commitment to the Australian people before the election, that they weren’t going to make changes to super,’ he told the ABC’s PM radio program on Tuesday.
The existing rules, that debuted in 2006, mean high-income earners on $180,000 are taxed much less than their marginal income tax rate of 45 per cent.
It is also a big saving for those in low and middle income tax brackets, who are taxed at 32.5 per cent between $45,000 and $120,000; and 37 per cent between $120,000 and $180,000.
