Battle for fairer retirement system steps up a notch
SIX heavyweights of the retirement industry have joined forces in response to the concerns raised over the Labor Party's recommendations for how it would handle franking credits.
The Australian Shareholders' Association, Australian Listed Investment Companies Association, National Seniors Australia, SMSF Association, Self-managed Independent Superannuation Funds Association, and Stockbrokers & Financial Advisers Association have formed the Alliance for a Fairer Retirement System (AFRS).
Their aim is to explore options to fix problems with the existing superannuation taxation, Age Pension means testing and broader retirement income systems.
The spokesperson for the Alliance, Professor Deborah Ralston, said, "I am very pleased that the Alliance has been formed as it will contribute substantially to the debate on improving retirement outcomes for millions of Australians.
"We need more evidence-based research and policy development and increased bipartisan support to complete the development of Australia's retirement income system. Once that development has been completed, there needs to be a period of ongoing stability for the system so that Australians can plan for their retirement with confidence."
The previous response to Labor's proposal to disallow refunds of excess franking credits for a range of retirees and shareholders generated considerable negative feedback from a variety of corners of the retirement and financial industries.
Michael Lorimer, managing director of the Self-Managed Independent Superannuation Funds Association added, "The consequences of this proposed policy will hurt real people who are not wealthy. Just because you have a SMSF or small APRA fund does not mean you are 'wealthy'. Labor's proposed policy will change investment behaviour which may drive more people onto reliance on the age pension. The announced carve-outs are arbitrary and mean there may be more complexity and unfair consequences will ensue."
The new alliance is looking to use the weight of the more than a million voices of senior Australians, shareholders, self-funded retirees and those planning a sustainable retirement that they represent, to trigger a debate on tax reform which will fund sustainable, fair, private and public pensions.
Australian Shareholders Association chief executive offer Judith Fox pointed out that most people providing for their retirement, expect that the system won't change.
"Having a self-funded retirement income requires long-term planning and stability," Ms Fox said. "Ad hoc policy changes erode trust and don't meet the need for a sustainable retirement savings plan. We need policy that looks at the superannuation and tax systems comprehensively rather than cherry picking elements to raise revenue."
In announcing the formation of the AFRS, the alliance noted that its members were considering a report on the implications of Labor's proposed policy on franking credits. "That report clearly exposes many of the poor design features of the policy and the unlikelihood that the projected revenues will eventuate if the policy was implemented," the alliance stated in its announcement. "The alliance will commission and encourage further research and policy discussion on these topics and intends to convene a summit later this year on retirement system design."