Treasurer Scott Morrison has opened up a debate on scaling back superannuation tax breaks to help fund income tax cuts.
In a speech to the Association of Superannuation Funds of Australia on Friday, Mr Morrison said superannuation had to be considered in the context of the broader economy.
“Could the costs of providing superannuation tax concessions, for example, be directed elsewhere in the economy to make it work more efficiently?” he asked at the association’s annual conference in Brisbane.
“Could they, for instance, be directed to tax cuts elsewhere, to encourage participation, productivity and growth?”
Mr Morrison said the government wanted to make sure superannuation tax concessions were appropriately targeted so Australians could secure an adequate retirement income.
But it shouldn’t be seen as an open-ended savings vehicle for wealthy Australians to accumulate large balances.
“It is not an estate planning vehicle nor was it ever intended to be,” he said.
“When Australians see the government supporting the accumulation of enormous superannuation fund balances … the confidence in the system is significantly undermined.”
He also warned the rigidity of caps and other rules could make it difficult for some people to improve their super balances.
Mr Morrison insisted there needed to be a balance between improving the system and offering stability.
“I want to see a superannuation system deliver greater choice, stronger governance, better information and more targeted incentives,” he said.