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

Opposition demands Government reveal super plans, Treasurer 'very close' to decision

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

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

The Federal Opposition is demanding the Government to reveal its superannuation plans, following a promise from Treasurer Scott Morrison that he is "very, very close" to making a decision.

Key points:

  • Labor asks Government to reveal superannuation plans
  • Treasurer says he is "very close" to deciding
  • Jim Chalmers wants to target concessions after retirement point
  • Treasurer argues young people would then hesitate to make contributions

Mr Morrison has given another strong indication that superannuation tax breaks — which are set to cost the budget almost $30 billion this financial year — are likely to be cut back.

Most people pay a 15 per cent tax on superannuation contributions, which is 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 super fund 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," he said.

"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.

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

Mr Morrison said he appreciated the sector wanted "certainty" and was keen for the Government to reveal its plans.

"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."

Younger people 'might get spooked', Treasurer warns

But Labor scoffed at the Treasurer's promise, saying he had already taken far too long to reveal his plans.

"We are now five minutes to midnight in an election year," Jim Chalmers, the Opposition's superannuation spokesman, said.

Labor's policy would cut superannuation tax rates for people earning more than $250,000 annually.

On retirement, earnings of more than $75,000 a year would be taxed at 15 per cent.

Mr Chalmers said targeting superannuation concessions after the point of retirement would impact far few Australians.

"Labor has had a policy on the table since April last year, which would impact one-fiftieth of those 9.5 million Australians that the Government is targeting," he said.

But the Treasurer warned against that approach, arguing that younger people might hesitate to make contributions to their superannuation if they felt the rules would change by the time they retired.

"If they're going to change the rules at the other end when you're going to be living off it then it's understandable that they might get spooked," Mr Morrison said.

AustraliaPlus


 

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