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Budget 2000: support for savings vital.



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4 May  2000

BUDGET 2000 - SUPPORT FOR SAVINGS VITAL

ASFA-The Voice of Super will be looking for a realistic level of funding for the Superannuation Complaints Tribunal (SCT), and a correction of the Timor Medicare surcharge anomaly, in the 2000-2001 Budget.

But the most welcome news of all would be details of a Review of Superannuation, says Philippa Smith, CEO of ASFA.

The Treasurer Mr Costello indicated at the beginning of this year that a Review of superannuation and retirement income strategies would be the next major item on the agenda after the GST and Ralph Review were finalised.

"Until such time as the Review is completed, our plea is for no more policy tinkering to the structure of superannuation. Australia’s retirement income strategy has suffered from too many band-aid changes, often because governments sought advance revenue streams from super. As a result the future retirement income of individuals has been depleted."

"Encouraging savings is of urgent economic and social importance, as evidenced by our worsening balance of payments situation," said Ms Smith. "Incentives to save will be squeezed further by the tax reform package and this needs to be rectified, but as part of a comprehensive Review."

Although the SCT was reinstated by the High Court last year, its funding has not been restored to pre-court case level and is not sufficient to deal with the backlog of cases that developed during that period.

"As the independent mechanism for dealing with complaints concerning superannuation, SCT funding needs to be maintained at realistic levels. It is vital that complaints can be quickly and fairly handled and that consumers have confidence in the arrangements," said Philippa Smith.

The flawed threshold assessment rules for the Timor Medicare surcharge, highlighted by ASFA in its Pre-Budget Submission to government this year, mean that ordinary wage earners could be artificially launched into the ‘wealthy’ bracket.

This would result in individuals losing a significant amount through the surcharge at the very time they face retrenchment or enter retirement. This unintended consequence can be fixed. ASFA is calling for Eligible Termination Payments (ETPs), which includes super payouts, to be kept out of the assessment for the surcharge.

ASFA BUDGET NIGHT CONTACTS

Philippa Smith and the ASFA team will be standing by on Budget Night, 9 May, to analyse and comment on Budget outcomes to journalists. They can be contacted on:

02 9264 9670 (direct line) or 0418 231 482 (mob) or 02 9264 9300 (then dial ext 41 when recorded message starts) Prior to 5.15 pm, the usual contact number - 02 9264 9300 -applies Further information: Gillian Tatt on 02 9264 9300

 

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Page Last Modified: 4 May 2000

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