Superannuation taxation reform: from the financial system inquiry report to legislative changes

This article examines the round of legislative changes to superannuation taxation that came into effect on 1 July 2017. It traces this process,
beginning with the comments and recommendations made by the Murray
Financial System Inquiry (the ‘Inquiry’). The Inquiry’s findings were
predominantly aimed at abating what it perceived to be the disproportionate flow of superannuation tax concessions towards wealthier members
of the community. A substantial number of its recommendations were
eventually implemented, but only after a change of leadership within
the government. Many of these legislative changes increase equity by
improving the targeting of superannuation tax concessions, and they do
so without any apparent substantial loss in economic efficiency, though
there is an increase of complexity in the application of the superannuation
system. Other changes, mainly those concerned with broadening eligible
superannuation income streams, enhance the ability of some retirees to
benefit from a reliable income stream. The article concludes that this
recent phase in superannuation changes is a positive step in the evolution
of Australia’s superannuation system.