FSC opposes threshold lift on inactive accounts

05-Aug-2013

By Kate Kachor

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The Financial Services Council (FSC) has labelled as unfair the federal government’s decision to increase the threshold for inactive superannuation accounts.

The measure, contained in the government’s pre-election economic statement, would increase the threshold from $2000 to $4000 from 31 December 2015 and increase it again 12 months later in 2016 to $6000.

“This measure is estimated to have a net positive impact on the budget in underlying cash balance terms of $582 million over the forward estimates,” Treasurer Chris Bowen and Finance Minister Penny Wong said in the 84-page statement released on Friday.

FSC chief John Brogden said the council could not support the measure and called on governments to focus on consolidating super and “not taking it”.

“We oppose this measure. Governments should be consolidating people’s superannuation, not putting it into consolidated revenue,” he said.

“This government’s own SuperStream reforms have made it easier to bring accounts together. It will unfairly capture the savings of many young and low incomes in particular.”

As well as the the increase in the threshold, Labor said it would also provide the Australian Taxation Office will $99 million over four years to address unpaid tax and superannuation.

“This measure will return $45 million in superannuation to Australian workers and ensure a level playing field for Australian businesses,” the statement said.

“This measure is expected to improve the underlying cash balance by $827 million over the forward estimates.

“Collecting unpaid entitlements like superannuation will boost workers' superannuation savings and help them achieve a more comfortable and dignified retirement.”

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