Thứ Năm, 4 tháng 4, 2013

Tax on super earnings over $100K

LABOR will raid Australia's superannuation accounts to plug its revenue hole, with earnings over $100,000 to be taxed under a plan unveiled today.

Treasury estimates around 16,000 Australians will be affected by the measure in 2014-15 which represents 0.4 per cent of Australia's projected 4.1 million retirees in that year.

Superannuation Minister Bill Shorten and Treasurer Wayne Swan this morning revealed Labor would cap the exemption for earnings on superannuation assets supporting income streams at $100,000 with a concessional tax rate of 15 per cent to apply after that. 

Tony Abbott immediately hit out at the planned reforms describing them as “another broken promise” that would result in less money in the pockets of Australians.

The changes would affect individuals with around $2 million of savings in superannuation and will take effect from July 1 next year.

"We want to make it better, we want to make it fairer and we want to make it stronger," Mr Swan said of the superannuation system.

The measures -- which will also hit politicians -- will bring in around $900 million in savings for the federal budget over the forward estimates.

Mr Swan said there was "something wrong" with the system that everyday working Australians weren't getting the best deal from superannuation.

Mr Shorten said "we want to take superannuation above politics".

"We believe the system should be targeted at everyday earning Australians," he said.

Super

Deputy Prime Minister and Treasurer, Wayne Swan and Minister for Financial Services and Superannuation Bill Shorten holding a press conference at Parliament House in Canberra. Picture: Smith Kym

"We all know that concessions can't be open ended.

"Once you've achieved a comfortable level in retirement savings, you probably don't need as much as those who haven't gotten to that point."

He said the changes "were not retrospective".

"Vigilance dictates that we must make these hard changes," Mr Shorten said.

Click on this link for the full announcement details.

People aged 50 and over will also get a boost to the tax free additional contributions they can make from $25,000 to $35,000.

However the measures may not even go to the parliament before the next election.

“We will do what we can in the time available before the next election," Mr Shorten said.

Tony Abbott today said the new measures were“yet another hit on Australian people”.

Share the anguish of columnist Joe Hildebrand, who painstakingly avoided talking about superannuation... until now.

The Opposition Leader said people would ultimately have less money as a result of the flagged changes.

“This is a government that is incompetent and untrustworthy,” Mr Abbott said.

“This is a government which is prepared to tax the people to fund own spending.”

He said if re-elected there was no guarantee Labor would stop at the measures announced.

“If they get three more years they will go further – it wont stop here,” Mr Abbott said, maintaining there would be no adverse, unexpected changes to superannuation under a first term of a Coalition government.

Under current arrangements on superannuation, all earnings on assets supporting income streams are tax free in contrast to earnings in the accumulation phase of superannuation which are taxed at 15 per cent.

As part of other changes today Labor will also establish a special Council of Superannuation Custodians to ensure any future changes to the sector are consistent with the agreed Charter of Superannuation Adequacy and Sustainability.

It will work to simplify the design and administration of the higher concessional contributions cap, reform the treatment of concessional contributions in excess of the annual cap, extend normal deeming rules to superannuation account-based income streams, extend concessional tax treatment to deffered lifetime annuities and further reform the arrangements for lost superannuation.

Asked if the changes would help fund the Gonski education reforms and the National Disability Insurance Scheme Mr Swan said it was one of many savings that would help bring back revenue.

"You do create room in the longer term for policy proposals," Mr Swan said.

"There is no magic wand or one area of savings that will instantly change the fact that revenues have come off dramatically."

Speculation over the government’s planned raid on superannuation hit fever pitch this week.

The reforms were due to be part of next month’s federal budget.

The Association of Superannuation Funds of Australia today welcomed the government’s announcement.

The organisation’s CEO Pauline Vamos said it would help stop the panic in the community and allow people to better plan for their retirement in an environment of stability and certainty.

"We have been calling on the government to put a stop to the hysteria and consider policies which take a long-term approach to the future sustainability of Australia's superannuation system,” Ms Vamos said.

She said there was a lot of complexity in the changes which needed to be considered carefully.

“We will examine these proposed changes in detail to ensure they deliver the best outcomes for the sustainability of the system and a comfortable retirement for all Australians."

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