FROM THE EDITOR DARIN TYSON-CHAN INAUGURAL SMSF ASSOCIATION TRADE MEDIA JOURNALIST OF THE YEAR
Don’t whinge. DO! Recent discussions about superannuation have been in the main centred on the COVID-19 relief measures, with a focus on the provision allowing individuals to access their retirement savings benefits early and in particular how appropriate, or not, the initiative has been. A lot of the criticism the federal government has copped over this scheme has been the damage it has potentially done to the future retirement savings of Australians. And this argument is being fuelled again with news at the end of July that 2.9 million people applied to access their super early during the first tranche of the measure, with a further million repeating the dose with the second tranche opportunity. So far the SMSF sector has fared better than the rest of the industry with regard to early withdrawals, with less than 1 per cent of the total applications for the measure coming from SMSFs. In raw numbers, 28,000 SMSF members accessed a total of around $280 million from their funds, according to SMSF Association chief executive John Maroney. To put this in context, the latest Treasury estimates indicate $41.9 billion will leave the super system by the time the early access window is closed. This does not mean SMSFs are immune to the current predicament though. But we have heard and continue to hear whinging from pillar to post, mainly from the industry funds, about how bad the initiative has been and how it needs to be shut down immediately. Well I hate to tell the leaders of the large super funds this, but the time for this debate is pretty much over. As they say in the
2 selfmanagedsuper
classics: shut the gate, the horse has bolted. So rather than look in the rear-view mirror, it’s time for the government and the industry as a whole to keep their eyes forward and come up with ways to repair this drain of funds to ensure the potential damage done to future super balances is somewhat repaired or at least mitigated. This was the subject of discussion during a thought leadership session at the recent SMSF Association Technical Day 2020 and some good suggestions were thrown up. These included ideas such as discounted tax rates on contributions for people who took up the offer to access their super early during the height of the coronavirus pandemic. Another recommendation was to allow some sort of excess contributions without penalty to achieve the same purpose. Or perhaps the restrictive contributions caps could actually be raised to a more reasonable and, in this case, practical level. Remarkably the need for incentives to channel more money back into super will obviously have to be considered and this probably means the old chestnut of generous tax concessions as a carrot to achieve this end will once again come into the spotlight. But even if this seems like it would bring the discussion right back to where we started, it has to be done. As I said before, there is no use complaining about the past; it’s time to do something to ensure the doom and gloom forecasts for people’s retirement savings in the future do not eventuate. To adapt a famous quote from AFL legend John Kennedy Senior to this situation: “Don’t whinge! DO!”
Editor Darin Tyson-Chan darin.tyson-chan@bmarkmedia.com.au Senior journalist Jason Spits j.spits@bmarkmedia.com.au Journalist Tharshini Ashokan t.ashokan@bmarkmedia.com.au Sub-editor Taras Misko Head of sales and marketing David Robertson sales@bmarkmedia.com.au Publisher Benchmark Media info@bmarkmedia.com.au Design and production RedCloud Digital
