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Category: Government and Politics / Federal Government / Superannuation / Business, Economics and Finance

Government 'very, very close' to superannuation decision: Treasurer

Thursday, 18 Feb 2016 15:39:46 | Dan Conifer

Most people pay a 15 per cent tax on superannuation contributions. (ABC)

The Federal Government is "very, very close" to making decisions about superannuation, with Treasurer Scott Morrison strongly indicating tax concessions will be cut.

Superannuation concessions are set to cost the budget almost $30 billion this financial year.

Most people pay a 15 per cent tax on superannuation contributions — well below the income tax rates for many Australians.

Mr Morrison said the Government would "like to see more targeted incentives".

"There is a strong case for examining the size and structure of the tax concessions and the treatment," he told a conference in Adelaide.

"It's clear that we are going to have to make some hard decisions when it comes to how we're going to address the targeting of these tax concessions going forward."

Earnings within the fund are also taxed at a maximum of 15 per cent.

Mr Morrison said the Government did not want super used as a low-tax inheritance system.

"It's important we remember why superannuation exists — it's there to assist those with the means to do so to achieve better retirement income and at the same time reduce pressure on the aged pension," he said.

"It's not there to be a tax incentivised estate planning vehicle."

The Government has been discussing possible tax changes for months, including to superannuation.

"We are now getting very, very close to the landing point on some decisions on super," he said.

"If we were in a position to make announcements on this sooner rather than later, then I think the Prime Minister and I would both like to do that.

"And then it would certainly be my hope that this wouldn't be a matter that needed to be revisited."

Labor last year announced a policy increasing superannuation tax rates for people earning more than $250,000 annually, and taxing earnings above $75,000 during the retirement phase.

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