‘Our money’: Karl unloads on proposed changes to superannuation

A review into superannuation has been met with criticism from some, including Today Show host Karl Stefanovic who has labelled it nonsense.

The Australian Treasurer Jim Chalmers drawn criticism for proposal to the country’s superannuation system to invest in national economic priorities like housing projects and renewables.

A Treasury consultationpaper released recentlysuggested that super funds invest “where there is alignment between the best financial interests of members and national economic priorities”.

The review also looked at retirement savings and flagged reducing concessional tax rates for large super contributions which are said to cost Australia $50billion a year.

Treasurer Jim Chalmers has proposed new changes to superannuation. Picture: Gary Ramage

However, the proposed changes have been met with criticism from some quarters, including Today Show host Karl Stefanovic who questioned the purpose of investing in social causes rather than focusing on the best return for fund members.

His blow up was in response to comments from the Australian Financial Review’s economics editor John Kehoe, who suggested changes may see super funds shifting to investment in social and environmental causes.

“Chalmers is saying, ‘Look I’m not saying you have to take sub-optimal returns’, but if these returns stack-up financially, you should go and do it,” he said.

“So it’s more of a gentle nudge rather than forcing the funds to do it.”

Karl Stefanovic said. Picture: Today

“It’s our money in a super fund, and maybe I’m silly. I would just want the best return.”

“It doesn’t make any sense.”

Speaking to the Today Show, Queensland Nationals senator Matt Canavan also expressed his opposition, saying “It is our money. Just leave our money alone.”

“This is shaping up as a massive broken promise if they proceed with this,” he said.

Senator Matt Canavan. Picture: Monique Harmer

When asked if the tax concessions were fair and sustainable, Shadow Treasurer Angus Taylor added that any changes to Super would signal a broken election promise,.

Assistant Treasurer and Minister for Financial Services, Stephen Jones, defended the proposal, stating that the current system provides tax concessions to accounts with over $100m.

“We have got accounts in Australia with in excess of $100m in them, some well in excess of $10m and $20m in them getting amazing tax concessions – big cost on the budget,” he told Sky News.

Assistant Treasurer and Minister for Financial Services, Stephen Jones. Picture: Gary Ramage

“Superannuation is about retirement income, it’s not about tax minimisation and it’s not about estate planning.”

Dr Chalmers defended the proposed changes while taking a shot at his opposition.

He called the early release of super during the Covid-19 pandemic a “debacle” that forced the public weigh up better incomes in retirement against paying their bills.

He suggested winding back the flat 15 per cent concessional tax rate for Australians depositing up to $27,500 a year into their super, stating that the current system is not sustainable and that changes are needed to ensure good retirement incomes for a broader number of Australians.

Tax rules that were introduced in 2006 allow high-income earners on $180,000 to pay significantly less tax than their marginal income tax rate of 45 per cent. Meanwhile, those in the low and middle-income tax brackets, with incomes between $45,000 and $180,000, benefit from significant tax savings under the same rules.