No new major superannuation announcements

Budget Review 2013–14 Index

Kai Swoboda

On 5 April 2013, the Government made a number of announcements relating to changes to superannuation, including capping the tax exemption for earnings on superannuation assets supporting income streams at $100 000 and increasing the concessional contributions cap for those aged 50 or more.[1] The Government’s overall intent in making these changes was to ‘improve the fairness, sustainability and efficiency of the superannuation system’.[2] The measures also provided savings to the budget of $947 million over the forward estimates.[3] A separate Parliamentary Library brief summarised these announcements.[4]

The 2013–14 Budget included some more detailed costing for these measures, with only a minor change in total savings over the forward estimates from these announced measures ($901 million).[5]

In addition to including these previously announced measures, the 2013–14 Budget included only a small number of minor superannuation budget measures at a net cost of around $10 million over the forward estimates including:

  • amendments to the 2012–13 Budget measure to reduce the contributions tax concession for those earning more than $300,000 (exempting federal judges sitting on or after 1 July 2012); using a similar definition of income to that used for calculating whether a person is liable to pay the Medicare levy surcharge; and refunding to former temporary residents the tax paid under the measure (revenue gain of $25.2 million over the forward estimates)
  • further grants of financial assistance to compensate members of four superannuation funds, formerly under trusteeship of Trio Capital Limited (Trio), that suffered losses due to fraudulent conduct (the cost of $16.7 million in 2012–13 recovered by industry levies collected in 2012–13)
  • additional funding for the Superannuation Complaints Tribunal (cost $2.6 million over four years to be recovered by industry levies)
  • funding to support the development of a Charter of Superannuation Adequacy and Sustainability and establishment of Council of Superannuation Custodians (cost $0.2 million over four years), and
  • amend the eligibility criteria for the low income superannuation contribution to pay individuals with an entitlement below $20 (cost $15 million over four years).[6]

The superannuation industry was generally appreciative that no further major changes were announced.[7] The Association of Superannuation Funds of Australia noted that:

Over the past few months we have expressed concern regarding the impact on community confidence in superannuation as a result of the ongoing speculation. These concerns appear to have been addressed.[8]

[1].       W Swan (Treasurer) and B Shorten (Minister for Financial Services and Superannuation), Reforms to make the superannuation system fairer, joint media release, 5 April 2013, accessed 14 May 2013.

[2].       Ibid.

[3].       Ibid.

[4].       K Swoboda, ‘Announcements end superannuation budget speculation?’, FlagPost weblog, 8 April 2013, accessed 15 May 2013.

[5].       Australian Government, Budget measures: budget paper no. 2, 2013–14, pp. 39–42, 151, 271, accessed 15 May 2013.

[6].       Ibid., pp. 38, 266 and 270–271.

[7].       Association of Superannuation Funds of Australia, Budget allows people to plan for their retirement with certainty, media release, 14 May 2013, accessed 15 May 2013; Australian Institute of Superannuation Trustees (AIST), Super relief: AIST welcomes stability for Australians saving for retirement, media release, 15 May 2013, accessed 15 May 2013; SMSF Professionals’ Association of Australia, SMSF trustees and advisors sleep easier after 2013 budget, media release, 14 May 2013, accessed 15 May 2013.

[8].       Association of Superannuation Funds of Australia, op. cit.

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