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Regulation, Superannuation

Superannuation balance cap position applauded

superannuation balance cap

Labor’s commitment not to introduce a superannuation balance cap should it form government later this year has been applauded by the SMSF Association.

The SMSF Association has welcomed the federal opposition’s confirmation it will not be introducing a superannuation balance cap should it form government after the election set to be held in May this year.

Shadow Treasurer Jim Chalmers recently announced the Labor Party has no intention of introducing any new superannuation taxes or balance caps as part of its policy platform should it be elected at the next federal election.

“Constant changes to the superannuation tax settings erode confidence in the system and discourage members from making long-term savings plans,” SMSF Association chief executive John Maroney said.

The industry body also took the opportunity reiterate its position on the notion of caps imposed on the superannuation balances of individuals.

“We do not and have never supported such a cap,” Maroney stipulated.

He acknowledged the SMSF Association suggested in 2020 the issue of extremely large retirement savings balances should be examined as part of the Retirement Income Review but noted it stopped short of recommending where the limit on balances should be made.

“It’s our position that any proposal to restrict retention of extremely large balances in superannuation needs to be handled carefully to ensure that any rule changes allow adequate time to manage the restructuring that would be involved, especially where large illiquid assets are involved,” he explained.

The Labor Party has indicated it would like superannuation to play a bigger role in Australian society if it forms government later this year.

Shadow Assistant Treasurer and Shadow Minister for Financial Services Stephen Jones said the opposition believes the ever growing pool of retirement savings can be used not only for the benefit of superannuation fund members but for the national interest as well.

He nominated infrastructure as one sector of Australian society where superannuation can definitely play a bigger role in conjunction with other government spending.

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