The Business Council of Australia welcomes the opportunity to comment on the Treasury’s consultation paper on Better Target Superannuation Concessions.

Superannuation is one of the three pillars of the retirement income system and policy decisions about superannuation touch on major areas of government policy, including the tax and welfare systems and home ownership.

Individuals may spend more than 40 years saving for retirement during their working lives and could have over 15 years in retirement. It is undeniable that the economic and policy landscape will change over such an extended time. It is also reasonable for the public to expect a relative degree of certainty over the policy arrangements for retirement incomes given these long horizons and the complexity of the issues involved.

Despite this, retirement income policy arrangements have been changed repeatedly, undermining confidence in the system and the ability to plan for retirement. It is important that further changes in the taxation arrangements for superannuation, even if narrowly targeted, promote certainty and confidence in superannuation as a whole.

To this end, it is important that governments do not come to view the pool of superannuation savings as a politically expedient source of additional revenue for the purposes of balancing the budget, which is not to deny the importance of budget balance. Individual tax measures that are seemingly well-targeted on equity or other grounds may cumulatively pose a threat to the integrity of the system, not least by raising uncertainty about future taxation arrangements.

The currently narrow scope of the proposed increase in tax on earnings on superannuation balances over $3 million has emerged in the context of a public debate that canvassed a wider range of potential additional taxes on superannuation. The previous government also made incremental changes to the taxation of superannuation, such the transfer balance cap and lowering the threshold for Division 293 tax.

In this context, those making saving decisions today might reasonably apprehend that the tax burden on superannuation savings will continue to increase over time, undermining confidence in superannuation as a saving vehicle. This trend to seek additional revenue from the superannuation savings pool is in effective opposition to the government’s stated desire to promote stability and confidence in superannuation through the legislated objective for superannuation.

You can read our full submission here.