Institute of Public Affairs | Australia’s leading free market think tank
12 July 2016 (sic)
IPA: SUPERANNUATION TAX HIKES SHOULD BE REPLACED BY SPENDING CUTS
The Turnbull government should cut government spending or delay the introduction of its proposed company tax cuts instead of increasing taxes on superannuation says Dr Mikayla Novak, Senior Research Fellow at free market think tank the Institute of Public Affairs.
Dr Novak was responding to media reports that the Turnbull government was considering modifying its controversial superannuation tax increases.
“The superannuation tax increases are projected to raise a net total of $2.9 billion over the next four years.
There are many alternative ways of financing this amount, including:
- Means-testing the child-care rebate and tightening eligibility for Family Tax Benefit Part B
- Reducing expenditure across all government departments by one-fifth of one percent
- Delaying the company tax cut by 3 years and reducing corporate welfare spending”
| 2016-17 $m | 2017-18 $m | 2018-19 $m | 2019-20 $m | Total $m | |
|---|---|---|---|---|---|
| Middle-class welfare reforms | |||||
| Means-test Child Care Rebate | 250 | 250 | 250 | 250 | 1,000 |
| Tighten eligibility for FTB B | 500 | 500 | 500 | 500 | 2,000 |
| Reduce cost of government by 0.2% | 723 | 739 | 776 | 804 | 3,042 |
| Other measures | |||||
| Delay company tax cut by 3 years | 400 | 500 | 800 | – | 1,700 |
| Reduce corporate welfare spending | 427 | 317 | 237 | 208 | 1,189 |
Some of these proposals were outlined in Dr Novak’s research paper ‘Making Welfare Sustainable-Targeting welfare to those who need it most’ published in November last year.
“Company tax cuts should not be paid for by increasing taxes on retirement income.”
“The superannuation changes announced in the 2016 Budget do more to damage confidence in the
retirement income system than they are worth in dollar value.”
“The government is right to be concerned about its credit rating, but the most important step in the path to budget repair is to get control of spending, ” Dr Novak said.
For media and comment:
Mikayla Novak, Senior Research Fellow, Institute of Public Affairs, mnovak@ipa.org.au or 0448 276 376.
