A fast-moving couple of weeks

Since my last blog, Should our Super be Limited?, there has been quite a bit of press

coverage, not only in the financial sector, but also in mainstream media on potential changes to superannuation.

This media attention coincides with the Government having just released its consultation paper that proposes enshrining the objective of superannuation into law, on 20 February 2023

But this is not a new idea.

Having a legislated objective of superannuation was originally floated following the 2014 Financial System Enquiry.

The most recent consultation paper proposes the:

“The objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.”

This stated objective is certainly in line with what many would regard as both reasonable and, in the main, commonly understood.

Some of the key take outs from the proposed objective include:

Preserve savings – superannuation is intended to provide for retirement purposes. Preservation forms part of the current superannuation landscape in that superannuation cannot generally be accessed until retirement.

Deliver income – before 1 July 2007, once a person turned 65 and were no longer working, they were required to commence drawing an income stream, or withdraw their savings from super. They could not simply remain in an accumulation account. The proposed objective refocusses on the intent of superannuation being for the provision of income in retirement, rather than simply being a tax-advantaged “bucket” to continue to accumulate wealth, often for the next generation.

Dignified retirement – having the ability to receive income from superannuation, in addition to government income benefits like the age pension, can contribute to retirees living a more dignified retirement.

Government support – the government provides income support to eligible older Australians in the form of the age pension. At best, as the only source of income, the age pension will allow for a very modest retirement lifestyle. However, if retirees are renting, even the age pension alone will generally be insufficient to provide even a modest retirement lifestyle. The objective of superannuation is to enable retirees to either be self-funded in retirement, or at the very least, be able to supplement their government age pension. Superannuation is a component of the overall retirement income system.

Equitable and sustainable – the media commentary on enshrining an objective of superannuation has largely been focussed on suggestions a cap or limit may be placed on the amount of money a person may accumulate in superannuation.

The government has invited feedback and comments on its proposed objective of superannuation. Submissions close on 31 March 2023.

Those supporting the objective, and those opposed, will all contribute passionately to the debate.

I suspect that we may see further developments, including any proposal to cap maximum superannuation benefits, announced in the federal budget to be brought down on 9 May 2023.

Watch this space!


On 28 February 2023, the Treasurer announced that rather than placing a direct cap on the amount of superannuation a person can have, the tax rate on investment earnings for people with balances over $3m, will double.

Superannuation funds currently pay tax at a rate of 15% on their investment earnings. While there is little detail available, the proposed change will see this increase to 30%, from 1 July 2025.

The devil will be in the detail.


By Peter Kelly on 1 March 2023


Peter Kelly

PK believes people have the right to accurate, affordable and unbiased information that addresses all aspects of their preferred retirement lifestyle, thereby giving them the opportunity to make informed decisions that will empower them to live out their lives with dignity, certainty and security.


Mark Teale

Tealey’s ambition is to change how people think about their retirement, he wants people to dream, plan and realise retirement is not defined by a magical age prescribed by the legislation.


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