Superannuation plays an integral role in encouraging Australians to be self-sufficient and reducing the fiscal burden on future generations to support a large, ageing population.
Australia’s superannuation system is mature and it is uncertain how introducing a legislated objective of superannuation (proposed objective) will assist in reaching that goal at this stage. Superannuation has been subject to frequent change which has impacted the community’s confidence in their ability to rely on their superannuation in the future.
There are notable shortcomings in Australia’s superannuation system that prevent it from being efficient, simple and equitable. As highlighted in The Tax Institute’s Case for Change, holistic reform of the superannuation system needs to be seriously considered by Government. The introduction of a proposed objective without an accompanying plan for reform is unlikely to achieve the outcomes intended in the Consultation Paper.
For these reasons, we consider that a proposed objective, in isolation, should not be introduced at this stage. Alternatively, a proposed objective should be limited in scope such that it serves the purpose of only guiding, without restricting, the design of future superannuation policy.