The financial services industry has responded positively to the Government’s proposed superannuation guarantee (SG) increase, tabled in Parliament last week.
The Bill to increase SG contributions from 9% to 12% was introduced by Minister Bill Shorten alongside Labor’s controversial Mining Tax, the proceeds of which will go towards funding the increase. “Australians should not have to work hard and retire poor. Nine per cent super is simply not enough,” said Minister Shorten. (See: Government Moves Forward on SG Contributions Increase)
Association of Financial Advisers (AFA) CEO, Richard Klipin, said the Minister should be congratulated for taking the first step towards ensuring a better standard of living in retirement.
“Minister Shorten has identified what the financial advice community has been highlighting for years – that while currently only three million people in Australia are over the age of 65, by 2050 the number will have more than doubled to around eight million,” Mr Klipin said.
While currently only three million people in Australia are over the age of 65, by 2050 the number will have more than doubled
“An increase in the SG means that Australians will have larger superannuation account balances. Financial advisers have the skills, knowledge and experience to help people to make the right decisions about their superannuation and better prepare for retirement.”
The gradual increase of compulsory SG contributions was also supported by the Financial Planning Association (FPA). FPA CEO, Mark Rantall, said: “Government policy should encourage all Australians to accept responsibility to save for retirement. If our savings behaviour does not change, household debt will increase even further and more people will enter retirement with sizeable debt and will need to rely on the age pension at an earlier age. Initiatives such as the proposed SG, and working with a qualified financial adviser will ensure all Australians are better equipped for a comfortable retirement.”
The Self Managed Super Fund Professionals’ Association (SPAA) said it supported the initiative but urged the Government to address related superannuation issues.
“We call on the Federal Government to address other superannuation contribution issues, such as raising the annual concessional superannuation caps and finding a resolution to the excess contributions tax problem so confidence and certainty in the superannuation system can be restored,” said SPAA CEO, Andrea Slattery.
