Two recent developments suggest a refreshing and welcome change in attitude towards self provision for retirement via superannuation.
The previous government, egged on by Treasury, adopted a hostile approach to assisting people save for their own retirement while leaving untouched the more generous, open-ended assistance to negative-gearers who access tax deductions for borrowing other people's savings.
Now in a tight budgetary situation, the current government is almost certain to support the automatic indexation increases in both the concessional and non-concessional contributions starting on July 1 announced recently by the ATO.
While not restoring Labor's steep reduction in the concessional super caps, allowing the over 50s a concessional cap of $35,000 a year will still assist many older Australians to boost their retirement assets before they retire. The higher $30,000 annual concessionalcap for the under 50s will assist these taxpayers and, importantly, reduce the number of higher income younger people forced to pay penalties on excessive compulsory concessional contributions. Both of these consequences of the higher concessional contributions will increase the incentives for self provision and boost national savings.