Frydenberg flags super freeze

 

Treasurer Josh Frydenberg has weighed in on the superannuation debate in the clearest sign yet that the government may be considering a freeze to the legislated increase.

 

         

In a speech at the National Press Club, Treasurer Josh Frydenberg echoed the findings of the Retirement Income Review (RIR) and said that 9.5 per cent superannuation was enough to provide an adequate standard of living in retirement. 

“This is why, as the Prime Minister and I have said, we must rightfully and carefully consider the implications of the legislated increase to the superannuation guarantee before the 1st of July this year. This is even more important as we are in a time when our economy is recovering from the largest economic shock since the Great Depression,” Mr Frydenberg said.

The RIR found that there is a trade-off between wages and superannuation, with a median earner approximately $32,000 worse off over the course of their working life. 

While the Morrison government has so far shied away from using the findings to freeze the increase, Mr Frydenberg said that he would “remain sceptical of those who, in the pursuit of their own interest, seek to restrict the legitimate choices Australians should have to save for their retirement”. 

“It is simply not true, as some would have us believe, that there is not a limit to how high the superannuation guarantee can be increased in the name of delivering even higher retirement incomes,” Mr Frydenberg said.

“For some, there isn’t a problem that cannot be solved through higher rates of contribution to superannuation. These myths do not help Australians plan for retirement, or feel more confident and more secure in their retirement.” 

Mr Frydenberg also called on funds to create new products and guidance that would allow retirees to spend their super more effectively, noting that many passed away without spending the full amount.

“This is despite the fact that retirees today have not benefited from the superannuation system their whole working life. The review shows that, if nothing changes, by 2060 one in every three dollars paid out of superannuation will be as part of a bequest,” Mr Frydenberg said.

 

 

Lachlan Maddock
26 February 2021
smsfadviser.com

 

More Articles

Countries producing the most solar power by gigawatt hours

Check out the countries that produce the most solar...

Read full article

Illegal access nets $637 million

The ATO has found $637 million of superannuation savings has left the system due to illegal early access...

Read full article

Could your SMSF do with more diversification?

Australian Tax Office Office data shows a high percentage of SMSFs are lacking portfolio...

Read full article

Trustee decisions are at their own discretion: expert

A trustee doesn’t need to show reasons why they made a decision, they will only need to show they followed a...

Read full article

Planning financially for a career break

A pause in super contributions can have long-lasting effects. Here's how to plan ahead for super...

Read full article

Regular reviews and safekeeping of documents vital: expert

Keeping track of all documents relating to an SMSF trust deed is important if an estate planning issue arises...

Read full article

Investment and economic outlook, February 2024

Region-by-region economic outlook and latest forecasts for investment returns. . U.S. consumers in...

Read full article

Latest stats back up research into SMSF longevity and returns: educator

There was a dramatic decrease in the number of SMSF wind-ups from 2018 to 2023, indicating that the SMS...

Read full article

Sofie Korac is an Authorised Representative (No. 400164) of Prudentia Financial Planning Pty Ltd, AFSL 544118 and a member of the Association of Financial Advisers.

Financial Advice Sydney and the North Shore Office based in Gordon NSW

Financial Services Guide - Disclaimer & Privacy Policy

^