When Keating brought in the Superannuation for all he stated that it was for people to fund or part fund their retirement and to create a pool of national savings. It was never meant to be a wealth creation tool but that is certainly what it became, especially in the Howard and Costello years.
Capping it at $2M and leaving the tax free status of withdrawals upon preservation age would be better. Naturally this figure should be indexed.
$2M on a 5% drawdown is $100k a year. More than enough to retire on.
Most years your fund would earn more than this so often you wouldn't even be touching capital.
People may want more but there is nothing stopping those that have the means to achieve a higher balance investing it outside the Superannuation system.
Higher taxes on amounts over $X amount are likely to come about from all this. Personally I think they will set the amount below the touted $5M.
$2.5M or $3M is my guess. Earnings on amounts above taxed at 22.5% or 30%.
I don't think it fair to not let people take that extra out to spend or invest elsewhere rather than be subject to those higher taxes. Optional of course. Many are already put off about contributing extra to Superannuation now as it is locked up for so long and at the whim of changing legislation.
At least having an out clause at a certain dollar amount gives a surety that at least down the track if you have put extra in and invested well, you have an out for some of your money.
