Many, many years ago, during my first year at university studying business, one of the subjects I had to enrol in was quantitative methods, where I learned about statistical analysis. It taught me about the fundamentals, such as bell curves, normality, standard deviations and the like.
One concept that was emphasised was the importance of sample size when contemplating any sort of statistical examination. Basically the number of people surveyed or data points included had to be large enough to provide an accurate and representative picture that would allow you to draw a sound conclusion about the theory or subject you were examining.
Thirty-four years later and I realise I should not have bothered with retaining the knowledge imparted to me from this subject as Assistant Treasurer and Financial Services Minister Stephen Jones effectively dispelled it in one simple speech.
At the recent AFR Super and Wealth Summit 2022 in Sydney, Jones revealed the government is looking to review the tax concessions currently embedded in the superannuation system as Canberra thinks they are too generous because the incentive has allowed some people to accumulate too much in their superannuation funds.
Why is this considered so egregious? Because the more money that is held in super, the less government revenue is collected, especially if the individuals with these substantial retirement savings asset balances are in pension phase, which is tax-free.
Granted this could be a problem for government inflows, in theory, but of course it really depends on how many superannuants Jones is looking at. By his own admission it is a matter of 32 SMSFs that have asset balances over $100 million, including one that has accumulated benefits of over $400 million.
The ATO SMSF Quarterly Statistical Report for June 2022 indicated there were a total of 603,432 funds at that time. This means the 32 funds Jones has singled out represent just 0.005 per cent of the whole SMSF population and an even smaller proportion of the entire Australian superannuation landscape.
So are we to believe superannuation tax policy is to be reviewed and rewritten because 0.005 per cent of SMSFs have balances over $100 million? More importantly, has the member for Whitlam now rewritten the widely accepted rules of statistical analysis whereby 32 can now be considered a representative sample size?
Applying this principal, will the next census require only 32 individuals to participate in order to accurately reflect the current make-up of the Australian public? If the answer is yes, we might find people actually desperate to participate in the exercise as it would mean membership to a very elite club.
I think the folly of using these 32 funds as the basis for formulating amendments to superannuation policy is there for all to see.
However, we might be able to draw some solace from the possibility any proposed amendments to the superannuation tax concessions will not come to fruition anytime soon. After all, the Minister did say any change to the retirement savings framework will only occur after an agreed objective or purpose of superannuation is legislated.
Given this notion of having a defined role of super arose out of the Financial System Inquiry finalised in December 2014 without progression since, we may not have to worry about the aforementioned amendments for at least another eight years.
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