Huge income tax cuts aside, the biggest surprise of this year’s Federal Budget was the new arrangements for superannuation.

Treasurer Peter Costello has made it clear the Government wants Australians to invest more than the minimum in their retirement accounts. Investment advisers have also welcomed moves to clarify the international tax obligations of non-residents and their trustees.

Investment and Financial Services Association CEO Richard Gilbert says the changes will create greater certainty for international investors.

“The process will provide internationally competitive withholding tax rates for countries with which Australia has double tax treaties,” he said after the budget detail was unveiled.

Mr Gilbert says the changes will ensure Australia continues to flourish as a competitive and viable financial services centre.

Australian savers have also won in the budget, with the abolition of the tax on superannuation withdrawals. In a big push for extra superannuation contributions, the Government also withdrew its reasonable benefits limits on lump sum and pension payouts.

The Financial Planning Association says it has been advocating these sorts of changes for more than a year. Policy and Government Relations Manager John Anning says he is pleased the Government acted to make retirement saving simpler and more affordable.

“The changes are evidence the Government has considered the views of the industry and will generate more interest in superannuation savings, as many of the hurdles have been removed,” he said.

The taxation changes are budgeted to cost the Government $6.2 billion over the next three financial years.