Australians Urged to Take Control of Superannuation as System Faces Reform and Rising Pressures
As Australia’s $4 trillion superannuation system undergoes increasing scrutiny and reform, financial experts are urging individuals to take proactive steps to secure their retirement outcomes. Whether early in one’s career or approaching retirement, small and consistent actions can significantly improve long-term financial wellbeing.
With new taxes proposed on large superannuation balances, heightened regulatory oversight of fund performance, and growing concerns about intergenerational equity, Australians are being encouraged to reassess how they engage with their superannuation and to adopt practical strategies that can help them retire with greater financial security.
Craig Phillips, Senior Financial Adviser at Phillips Wealth Partners, says many Australians mistakenly believe superannuation is a passive system that will take care of itself. “Most people who walk into our office assume superannuation is a ‘set and forget’ arrangement. They believe it is quietly accumulating in the background and will somehow be sufficient when retirement arrives. Unfortunately, that is not always the case,” Mr Phillips said.
A System Under Pressure
Recent discussions at the AFR Super and Wealth Summit have highlighted the growing pressure on the superannuation system to deliver better retirement outcomes while managing longevity risk and balancing the needs of different generations. The government has introduced a tax on balances exceeding $3 million and is exploring reforms to improve access to financial advice.
Treasurer Jim Chalmers has reaffirmed the government’s commitment to maintaining concessional treatment for retirees. Speaking on ABC’s Insiders, Dr Chalmers stated, “They still deserve concessional treatment to encourage people to be in superannuation, and that is not something that we have been proposing to change.”
Dr Chalmers acknowledged the importance of fairness across generations, noting that intergenerational equity would be central to any future tax reforms. “There was no rewriting of policies at the conclusion of the roundtable,” he said. “More broadly, intergenerational equity has been a motivation for so much of what we are already doing in tax.”
The Treasurer confirmed that the proposed changes to tax on super balances over $3 million would not be introduced in the upcoming parliamentary sitting fortnight but would be legislated in due course. “I proposed what is a pretty modest change, but a meaningful change which makes the system a bit more sustainable,” he said. “It does not begin to be calculated until the second half of next year, and so we have got time to reintroduce that.”
Meanwhile, Shadow Treasurer Ted O’Brien has warned that continued government spending could lead to further tax increases. “If you just keep on spending, you have got to get the money from somewhere,” Mr O’Brien told Sky News. “When you cannot control your spending, you are just going to increase debt and increase taxes. That is pretty clear.”
Practical Steps to Grow Superannuation
Despite the complexity of the system and the ongoing policy debate, financial advisers say there are simple, achievable strategies that individuals can implement to improve their retirement outcomes.
“These are not complex financial strategies,” Mr Phillips said. “They are small, practical steps that do not take long to implement but can make a significant difference over time.”
1. Review Your Super Fund Regularly
Selecting the right superannuation fund is essential to achieving long-term retirement goals. The Australian Taxation Office’s YourSuper comparison tool enables users to evaluate fund performance, fees, and features, helping them make informed decisions.
With the government tightening performance benchmarks and increasing transparency requirements for funds, it is more important than ever to ensure that one’s fund is competitive. Regular reviews can help individuals avoid underperforming options and take advantage of better investment strategies.
“People often stay with the same fund for decades without checking whether it is still the best option,” Mr Phillips said. “A simple review every year or two can reveal whether your fund is delivering value or falling behind.”
2. Use Salary Sacrificing to Your Advantage
Salary sacrificing remains one of the most tax-effective ways to grow superannuation. By contributing pre-tax income into a super fund, individuals reduce their taxable income and benefit from the concessional 15 percent tax rate on contributions—significantly lower than most marginal tax rates.
Even modest contributions can make a substantial impact. For example, contributing an extra $20 per week from salary could add tens of thousands of dollars to a superannuation balance over time, thanks to compound growth.
“This is one of the most powerful tools available to working Australians,” Mr Phillips said. “It is simple to set up, and the long-term benefits are enormous.”
3. Make Lump Sum Contributions and Claim Deductions
Another effective strategy is making lump sum contributions from after-tax income and claiming a tax deduction. This can be done via BPay or bank transfer, followed by submitting a notice of intent to claim a deduction to the fund.
Once processed, the contribution is taxed at 15 percent, and the amount can be claimed as a deduction on the tax return—potentially increasing the refund. This approach is particularly useful for those with irregular income or windfalls, such as bonuses or asset sales.
“Many people are unaware that they can make a one-off contribution and still receive a tax benefit,” Mr Phillips said. “It is a flexible strategy that suits a wide range of circumstances.”
Looking Ahead
Experts at the summit also emphasised the importance of aligning superannuation investments with national priorities such as housing and the energy transition. These areas offer both growth potential and the opportunity to contribute to broader societal goals.
As the superannuation system continues to evolve, Australians are being urged to take greater ownership of their retirement planning. With practical strategies and informed decisions, individuals can navigate the changes and secure a more prosperous future.
“Superannuation is one of the most powerful wealth-building tools available to Australians,” Mr Phillips said. “But it only works if people engage with it. The earlier you start, the more options you have, and the better your outcomes will be.”
For more information or to book a discovery meeting, visit www.phillipswp.com.au or call 1300 10 22 33.
DISCLAIMER: This article is based on content presented by Phillips Wealth Partners Pty Ltd (ABN 74624858420), trading as Phillips Wealth Partners. Craig Phillips is an Authorised Representative (No. 334567) of Fintegrity Wealth Advisers Pty Ltd (ABN 89653321487 AFSL 534971). The information provided is general in nature and does not constitute specific aged care, taxation, superannuation, retirement investment or social security advice. It is based on current laws, rulings, and interpretations as at the date of publication. Readers should seek personalised advice before making financial decisions.