Following speculation that the government may look to implement major changes to the taxation of super in the federal budget this year, Senator Jane Hume has promised there “will be no adverse changes to taxes in superannuation” at a recent Tax Institute conference.
The Morrison government issued a guarantee that it would not implement new taxes on superannuation in the lead-up to the federal election in 2019, following measures announced by Labor to scrap cash refunds on dividend imputation credits, changes to the Division 293 tax threshold and lower non-concessional contribution caps.
The Coalition introduced significant changes to superannuation in 2016 including the $1.6 million transfer balance cap.
Following the economic fallout from COVID-19, however, a number of industry commentators in the superannuation space have predicted that the government may look to make significant policy changes to the age pension system and taxation rate for superannuation as it grapples with the ballooning budget deficit.
While Senator Hume said the government is standing firm on its election promise of no adverse changes to taxes in super, there continues to be “necessary tinkering within the regulatory settings for superannuation”.
“This does not necessarily mean instability and uncertainty for members. It simply means that our superannuation funds are held to the highest standards of accountability and transparency,” she said.
As previously announced, the government will delay introducing the legislation giving effect to the retirement income framework.
“Instead the government will give effect to a principles-based retirement income covenant for consultation with the industry at a later date,” she stated.
“I’d like to see trustees ensure that members have more options to draw down on their retirement savings in order to maximise their living standards in retirement.”