Reductions in minimum drawdown requirements for self-funded retirees will be extended until at least the middle of next year.
In a bid to win the retiree vote ahead of the upcoming election budget, Treasurer Josh Frydenberg has pledged the Coalition will not touch superannuation tax and will extend minimum drawdown reductions brought in during the pandemic until June 2023.
The halving of the minimum drawdown for self-managed super funds means a retiree holding $250,000 would only have to withdraw $8750 instead of the full 7 per cent drawdown legally required each year.
"This will provide retirees with greater flexibility and certainty over their savings," Mr Frydenberg said.
"We recognise the valuable contribution self-funded retirees make to the Australian economy and the sacrifices they made to provide for their retirement."
The drawdown was reduced during the pandemic to ease pressures on Australian retirement income system.
Mr Frydenberg said the reduction was a pre-election promise if the Coalition is returned to government following the May election.
There are around 1.8 million super accounts subject to the minimum drawdown rule.
The Treasurer also used the announcement to bash Labor, claiming the opposition was yet to rule out imposing higher taxes on superannuation.
"Labor sees success as something to be taxed, not celebrated," Mr Frydenberg said.
"At the last election, Labor promised $387 billion in higher taxes including on retirees and their superannuation. That's why they can't be trusted by retirees to not increase taxes on their hard-earned savings."
Mr Frydenberg accused Labor of belittling self-funded retirees claiming them to be the "top end of town".
Despite the economic recovery underway, financial markets remain volatile as a result of the pandemic and the added pressure caused by the Ukraine conflict.
On March 7, the VIX volatility index on the S&P 500 peaked to 36, mostly in relation to sanctions placed on Russia following its invasion.
Mr Frydenberg previously said the conflict in Europe would have some impact on the Australian economy and was most evident in the rising costs of fuel and other goods.
The federal government has already repealed the work test for voluntary non-concessional and salary sacrifice contributions.
It has also reduced the age eligibility for downsizer contributions and increased the maximum number of people allowed in a SMSF from four to six.
Labor treasury spokesman Dr Jim Chalmers on Thursday outlined the party was looking at potentially relaxing rules for pensioners to return to the workforce.
He said these discussions were occurring due to skill and labour shortages currently impacting the economy.
"We do have a problem right now where a lot of businesses are looking for workers," Dr Chalmers said on 3AW Mornings.
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