Superannuation hopes dashed again

"The federal Government has provided a 'mish mash' of reforms in place of a long term policy platform. This will impact on future retirement expectations of thousands of Australians, says the Institute of Public Accountants (IPA).

"While the budget made some good announcements for the superannuation sector these have been tempered by other negative announcements.

"We welcome the Government's commitment to finally reform the Excess Contribution Tax by taxing people at their marginal tax rate plus an interest charge, rather than at the highest marginal tax rate.

"We also welcome the announcement to increase the concessional cap from$25,000 to $35,000 for those over 60  from 1 July 2013 and for those over 50 from 1 July 2014. However, we are concerned this has been undone by reneging on the Government's previous commitment to increase the cap to $50,000 for those over 50 with low superannuation balances.

"Abolishing the Superannuation Guarantee maximum age limit is also something the industry has long demanded.

"However, there is no grand plan for the future; though we can be thankful that no further taxation of superannuation has been announced.

"While increases in the Superannuation Guarantee are welcomed, the funding for this needs to be considered and we need to recognise this will not be sufficient to address Australia's aging population in the long term, with more Australians going into retirement," said Mr Conway.