Two key measures in the 2017 federal budget that directly impact on super demonstrate the need to go ahead with enshrining the objective of superannuation in legislation.
Treasurer Scott Morrison last night announced a budget measure that was aimed at encouraging older Australians to free up housing stock by enabling those over the age of 65 who were downsizing their home to make non-concessional contributions of up to $300,000 into their super fund from the proceeds of the sale of their principal home.
The government would also provide a tax cut on first home deposit savings where first home buyers would be able to save for a deposit by salary sacrificing into their super account above their compulsory super contribution from 1 July.
Commenting on whether such measures worked against the proposed definition of super “to provide income in retirement to substitute or supplement the age pension”, SMSF Association head of policy Jordan George told selfmanagedsuper: “That’s an interesting one because the government still hasn’t passed the objective of superannuation, but they’re using the vehicle of super to achieve a policy objective.
“I think it’s important to acknowledge that housing is quite an important factor later in life and in retirement, so getting people into the housing market is important.
“However, if we did have the objective of superannuation legislated, we would’ve had a far better opportunity to understand what the government wants to achieve out of the super system.
“So that’s something we’d still like to see go ahead.”
George highlighted that if the objective of superannuation was passed, there would be less speculation for SMSF trustees, advisers and the sector to worry about before budget announcements.
“We’ve ended up with all this speculation we’ve had for the last few months about what could potentially happen with superannuation and housing,” he said.
“Stability and certainty for superannuation going forward is a good thing.
“All in all, it’s a positive budget for SMSFs. We were hoping for minimal changes and that’s what we got.”