The Institute of Chartered Accountants in Australia has used its pre-budget submission to call on the Federal Government to allow gearing in superannuation funds and to allow individuals to make the maximum deductible super contribution regardless of how income is earned. 
 
The Institute has also recommended the Government consider the Superannuation Guarantee to be used to pay off HECS debt.  
 
Whilst applauding the substantial reforms introduced by the Government in the 2006-2007 Federal Budget in regard to superannuation, the Institute has called for a further reforms outlined below.  
 
Recommendations to the superannuation regime include: 
 

• Equity changes to the Superannuation Guarantee Regime:  
   
  The Institute advocates the current Superannuation Guarantee legislation be reviewed; in particular S16 of the Superannuation Guarantee Charge Act, to ensure the penalty regime is equitable by targeting those employers that fail to comply at all.
 
 

• Allowing gearing in superannuation funds: 
   
  Rather than limiting borrowing to installment warrants, the Institute recommends that the Government consider allowing funds to borrow up to a total of 50 per cent of assets, reflecting the use of gearing as an important tool in maximising investment returns.
 
 

• Applying the Superannuation Guarantee to HECS debt:  
   
  The Institute proposes the Government allow the superannuation guarantee be applied to HECS debts for an undergraduate degree in the first three years of employment, or until the debt is paid off. Such reform would enable HECS debts to be repaid sooner, making available later after tax income for use in investment or increased savings.
 
 

• Deductibility of superannuation contributions: 
   
  The Institute proposes that limited access to deductible superannuation contributions, under section 82AAT of the Income Tax Act, be revoked allowing all employees to make their maximum deductible contribution, regardless of how their income is earned.