Labor not budging on super reforms
Glenda Korporaal – Senior Writer
10 May 2023
It is a tale of the two ends of town when it comes to the superannuation sector’s response to Labor’s second budget.
For a small sector of the population, with assets of more than $3m in their super funds – or approaching that level – the budget confirmed that they will be hit with 30 per cent tax on the increase in value of their funds above $3m from July 1, 2025.
The Self-Managed Super Fund Association, whose members will be most affected by the new tax regime, has called on the federal government to re-open discussions on the proposals to look at the potential impact on small business people, farmers, and others with property assets in their super.
SMSF Association chief executive Peter Burgess argues there has not been enough time for talks with government on the potential unintended consequences of its move and has hit out at the unfairness of taxing members on their super balances above $3m and not actual earnings.
Despite criticisms that yet another measure to crack down on super tax concessions could undermine confidence in system, that the $3m figure is not indexed – extending its application to an increasing number of people over time – and that it amounts to an unprecedented move to tax people on unrealised gains – as opposed to actual earned profits – the budget papers confirm the government has no plans to budge from its original proposal.
Having toughed it out so far with an ambitious tax plan which will mean a rethink of super for middle to upper-income workers, it doesn’t appear the government is going to respond to criticisms by making changes.
The government estimates the proposals will only affect some 80,000 people at the start date, but the lack of indexation of the cap means more will be affected over time. Rainmaker has estimated it could impact 100,000 Australians from its start date and affect some $410bn in savings in super.
It will also apply to people on defined benefit pensions of more than $180,000 a year, which will include politicians on the old pension scheme, including Prime Minister Anthony Albanese.
Those affected or potentially affected will now have to consider whether they need to pull assets out of their fund before the start date. Faced with being hit with a 30 per cent tax rate if the value of their property goes up over time – even if it is unsold – will put many of those affected in an untenable financial position.
The Opposition has pledged to overturn the measure should give it some pre-election fodder to make a pitch to small businesses, farmers and others that the government is not to be trusted on its super promises. But the next election could be held as late as May 2025, which would not give the LNP – were it to be elected and have some measure of control over the Senate – the time to reverse it by the start date of July 1, 2025.
So those affected either have to think about taking money out of their super by the start date, or taking the chance of doing nothing in the hope that a future LNP government could reverse it, backdating any reversal to 2025.
At the other end of town, the super sector celebrated one of the few new initiatives in the budget – the proposed shift to have super payments made with wages and not as much as every 90 days as is the case under the current regime.
The original system whereby employers can delay super payments to as little as every 90 days was introduced to help businesses cope with the payroll challenges of super. But with the business software programs available to the smallest of companies, it is not out of the question for changes to the payroll system to be made to accommodate paying super with wages. Paying super with wages makes it easier for people to check that their super is being paid properly – in the same way they check their wages – and will help reduce the impact of underpayment of super.
It is a measure that will particularly benefit low-income workers, casual workers and those with irregular work patterns who have been the most vulnerable to underpayment of their super entitlements.
Lobby group Industry Super Australia, which has long campaigned for measures to crack down on underpaid super, including those announced in the budget, estimated it could give some workers as much as $50,000 more on retirement.
It argues the underpayment of super has cost members as much as $33bn over the past seven years.
It also welcomed extra funds given to the ATO to crack down on the underpayment of super.
The Association of Superannuation Funds of Australia and other major industry funds also welcomed the moves.
KPMG’s national sector leader, asset and wealth management, Linda Elkins, also expressed the broad relief that this budget did not contain any major new changes to superannuation.
With the industry bracing ahead every budget for what could be another whack at super savings – as Elkins pointed out – the sector “cheered” on Tuesday night when it learned that there were no major changes this time around.
Most Australians with super, who wont be affected by the tax increase on those with funds over $3m, can relax for another budget.
With super experts such as Elkins having geared up for a big day of post-budget analysis on Wednesday, she joked that after this budget they would now be able to get together and have a party.
For most Australians, the super system is still an attractive way to save for retirement.
But for some others, that big sound you will hear in 2024 and the first six months of 2025 could be billions of dollars sucked out of the super system as those affected by the government’s proposals take some hard decisions.
Millions of young Australians could be hit by Jim Chalmers’ superannuation tax
Simon Benson – Political Editor
5 May 2023
More than two million young Australians earning an average wage throughout their working life could be hit with a future super tax under the government’s plans by exceeding the target threshold of $3m in their super balances before the age of retirement.
Analysis of Treasury modelling suggests that the Albanese government’s super tax plan to double the concessional tax rate on large super balances will disproportionately target younger Australians in the future, based on modelling provided to the Treasurer’s office in March. According to documents obtained under Freedom of Information, Treasury advised Jim Chalmers’ office that, based on its own assumptions, a 20-year-old today earning an average wage throughout their career would have a super balance of more than $3m by the time they reached their early 60s.
Opposition analysis of Australian Bureau of Statistics and tax office data based on the Treasury modelling suggests that this would impact 2.05 million Australians currently aged under 25.
The Treasury modelling confirms that the younger generation are more likely to be affected by the changes in the future than the majority of today’s older generations who would not reach the threshold by retirement.
The government claims that less than 1 per cent of superannuation accounts have balances of more than $3m. The Treasurer’s office on Thursday did not reject the analysis showing that two million young Australians could be hit by the future super tax hike, with a spokesman for Dr Chalmers saying Labor’s changes had received “deep and broad support from the Australian public”.
The proposed tax increase, which doesn’t come into effect until 2025, would see the concessional tax rate doubled from 15 per cent to 30 per cent on balances of more than $3m. The government has also ruled out indexing the $3m threshold.
Dr Chalmers has consistently defended the tax hike, claiming it is a “modest” change and will only affect wealthy superannuation funds, with his office telling The Australian it was a “modest and sensible change that helps clean up some of the mess the former government left behind”.
The tax increase is forecast to generate almost $2bn in revenue and provide structural relief to the budget over the longer term. Treasury has estimated the shake-up to affect about 80,000 people when it is introduced in 2025-26 and has forecast that, in 30 years, the top 10 per cent of earners would be captured upon retirement.
A briefing document provided by the assistant secretary of Treasury’s tax and transfer division, Adam Hawkins, to the Treasurer’s office on March 3 following the announcement of the policy, contained several cameos on which age groups would likely be captured by the changes and acknowledges the impact on younger workers while claiming the threshold was “very generous”.
“A 20-year-old today who earns an average wage throughout their career (around $90,000 in 2023), is projected to have a superannuation balance that exceeds $3 million in their early 60s,” one cameo revealed.
“That same individual is projected to have wages that exceed the top marginal tax bracket ($200,000) in their early 40s.”
On the other hand, a 20-year-old today who earned half the average wage throughout their career (around $45,000 in 2023), was not projected to have a super balance that exceeded the balance before retirement.
The Treasury note, provided as a briefing document for the Treasurer during question time, and released to the opposition under FOI on April 24, says the average wage was defined as being roughly 15 per cent higher than the median wage. “This means someone earning an average wage is earning more than 50 per cent of the population,” the document says.
It went on to clarify that older workers on average wages would not be captured by the tax change, which the government has relied on to bolster its argument that only wealthier individuals would be affected.
A second cameo modelling a 35-year-old today with a superannuation balance of $75,000, who would earn an average wage throughout their career was “not projected to have a superannuation balance that exceeds $3m before they retire”.
The same applied to a 50-year- old with a superannuation balance of $200,000 also earning an average wage throughout their career, which again was defined as $90,000 in 2023.
The document cited Grattan Institute analysis that projected that only the top 10 per cent of earners would retire with superannuation balances of around $3m or more in 30 years’ time.
In the expectation that questions would be asked over whether younger people would be captured by the tax changes if the threshold wasn’t indexed, the document said: “The $3m threshold is very generous. It can provide far more than what is needed to fund a comfortable retirement. This aims to provide structural savings to the budget over time.”
The Coalition, which had originally cast the tax hike as a broken promise by Labor not to touch super, has now labelled it as a future tax on young Australians.
Opposition treasury spokesman Angus Taylor said today’s youth would “pay the price of Labor’s reckless spending”.
“The idea that this policy change will only affect the super wealthy is complete nonsense,” Mr Taylor said. “These are hardworking Australian people in admirable and essential professions who are getting out there, having a crack and doing their bit for the economy.”
“This is a tax on young Australians’ future in order to pay for Labor’s pet projects today.
“Treasury’s own analysis shows that Labor’s doubling of tax on super will mean for the first time, young Australians will face higher taxes on their super than the generation before them.
“The government has been misleading Australia and it is time for the Treasurer to come clean and confirm exactly how many people will lose out under these changes.”
A spokesman for Dr Chalmers said that “three times more Australians retiring in 30 years’ time will be affected by the Coalition’s 2017 super change compared to our proposal.”
“All their hypocrisy and hyperventilating is to distract from the fact that the Liberals want to add to their trillion dollars of debt to fund bigger tax breaks for people who already have tens of millions in super.”
The Coalition lowered the income threshold for additional contributions tax for high income earners (Division 293) to $250,000 from 1 July 2017. This level was not indexed. On introduction, the Coalition’s change was estimated to impact 160,000 people in 2017-18.
Ex-Treasury official Terry O’Brien slams Jim Chalmers’ super tax hike
The Australian Business Review
Robert Gottliebsen – Business Columnist
1 May 2023
The best person to destroy a badly constructed Treasury case is a former senior Treasury officer. And that’s what has happened to the Treasury plan to double the tax on super balances over $3m.
Maybe it’s a coincidence but the tradition that in complex legislation informed submissions are posted on the Treasury website has been abandoned in the “$3m cap plan”, so the former Treasury official’s comments have not been revealed until now.
The former senior official is Terry O’Brien, who worked for some 40 years in the Commonwealth Treasury, Office of National Assessments, Productivity Commission and at the OECD and World Bank. O’Brien has not only torn the proposal to shreds but shown how the Treasury misquoted previous retirement reports to justify its case and did not take into account how government social services link to super.
But there could be a second reason why Treasury is so anxious to stifle debate on the proposal: too much publicity to the precedents created might threaten the very generous public service pension arrangements that were entered into many years ago and are no longer available to people now joining join the public service.
On February 28 the government announced that from July 1, 2025 there would be doubling of the nominal 30 per cent tax rate on super earnings over an unindexed $3m.
For the first time earnings are defined to include unrealised capital gains, taxed in full as income without the one-third discount usually applied to capital gains on assets held for a minimum qualifying period within a super fund.
O’Brien points out it is unlikely large amounts of revenue will be raised by the measures because those with $3m-plus super balances are already planning where to place their assets to reduce the taxation burden.
Many will increase their investment in the family home. In his Treasury decimation O’Brien says: “The measures are poorly justified by reference to a small number of large super balances, cited without information about how long ago those balances were initiated with large deposits, how much of those balances today are the returns to compound growth over decades, and whether any such large balances could be created today.”
At different times in the past the government of the day has enticed savers to invest large sums in super on the basis of the legislated rules at the time. Those who took up the government invitations probably represent the majority of those holding more than $3m in super. O’Brien points out that when they made the decision they had many other investment alternatives but they had faith in the government assurance, which has been dashed by a doubling of taxation.
Accordingly, he says: “The higher proposed tax is effectively retrospective, denying the targeted savers the legislated taxation treatment that drew their lawful savings into superannuation in the first place.
“Such policy reversals destroy confidence in superannuation saving, and should be avoided by grandfathering. Being unindexed, the $3m trigger damages confidence even among savers not presently near or over the trigger. If the measures proceed, the trigger should be indexed, at the least like the Transfer Balance Cap is indexed. There is now a shambles of different indexation rates for some key savings and retirement income parameters, coupled with failures to index others.
“It is misleading to claim that ‘By 2025-26, the changes are expected to apply to less than 80,000 people, meaning that more than 99.5 per cent of individuals with a superannuation account will be unaffected’.
“Ministers have already acknowledged that significantly higher percentages will be targeted over decades to come as a result of the compound growth of savings balances. It is laughable to claim that not indexing key parameters ‘provides certainty for people when arranging their tax and financial affairs’. “For those who have reached a condition for release of super funds, the measures as outlined in the consultation paper would likely trigger an exodus of savings near or over the $3m cap before 1 July 2025, and thus raise little revenue.”
“This is because accruals taxing of capital gains within super without discount yields effective tax rates above what many would face if capital gains were made outside of super and taxed with 50 per cent ‘discount’ only on realisation, under general tax principles.
“Savers also have the option of moving income caught under the proposed measures into their tax-free principal residence, which is unlikely to yield national economic benefit compared to allocation of super savings through competitive capital markets to finance productive investments.
“Imposing accruals taxation without discount for capital gains in superannuation – the longest-term, most patient saving in the Australian economy – seems driven wholly by the administrative convenience of superannuation funds rather than any consideration of sound tax principles.
“The measures introduce a distorting over-taxation of capital gains which creates an adverse precedent for the rest of the economy. They will embolden advocates of the reduction or elimination of the 50 per cent ‘discount’ in general CGT practice and the taxation of capital gains from the principal residence.
“Having proposed a retrospective, distorting tax policy on high superannuation balances in retail, industry and self-managed super funds, the Discussion Paper then seeks to project ‘commensurate unfairness’ on to defined benefit schemes that are in no way comparable. That idea should be dropped.
“The government’s objective (which we take to be raising more taxation revenue from savers with high superannuation balances) could be better met with less revenue evasion, less damage to tax policy principles and less damage to confidence in superannuation if the measures were withdrawn for extensive redesign. The measures apparently value the line of least resistance from retail and industry superannuation funds over alternative approaches that would preserve sound tax policy.
“The government should take its proposals back to the drawing board. With the measures yet to be put to parliament and not scheduled to take effect until July 1, 2025, there is plenty of time to achieve better outcomes.”
Robert Gottliebsen, Business Columnist
Better targeted superannuation concessions: consultation paper
Comments by Terrence O’Brien, 17 April 2023170423-Comments-on-better-targeted-super-T-K-OBrien
Legislating the objective of superannuation: Consultation paper, 20 February 2023
Comments by Terrence O’Brien, 31 March 2023020423-objective-of-superannuation-t-k-obrien
A Stronger And Cleaner Economy, Powered By Super
3 November 2021
JIM CHALMERS MP SHADOW TREASURER MEMBER FOR RANKIN
ADDRESS TO THE ACTU VIRTUAL SUPER TRUSTEES FORUM
It’s always a pleasure to be invited to address this Trustees Forum, something I’ve done most years now I think since about 2015. I’m grateful for that and for the opportunity to work closely with you, and for your work with Stephen Jones and our economic team.
Today I want to talk about climate change. But this gathering being so close to the election also gives us a good opportunity to first take stock of where we’ve been more broadly, and where we’re headed. The story of our economy and our super sector are so deeply intertwined over the last decade or so and will be even more so into the future.
Even though super played such an integral role in helping see Australia through the Global Financial Crisis, the Liberals upon coming to government froze the Super Guarantee.
When that freeze was followed by weaker wages growth, and when Australian GDP growth over the past eight years was the most tepid since the 1930s, driven in part by weak investment, the Liberals have still spent much of their time in office attacking super.
Last year, during our first recession in 30 years, they came after super with an early access scheme that bled $36 billion from super balances. And they had a good, long look at another freeze to the SG as well. My point is that at every juncture, the answer to every question, every challenge presented to this government in the economy, has been to blame and attack and diminish super.
This is partly out of envy at Labor’s creation, partly because it’s a partnership model bringing workers, unions and business together, but mostly out of blind, ideological recklessness. What makes this especially dangerous is that we need to get everything right if we are to avoid the future painted by the Treasury’s Intergenerational Report – which forecasts an economy smaller, slower, older, more stagnant over the next forty years than the last forty.
The Next Election is a Referendum on Super So that’s the context. I want to pay tribute to all of you, Scott Connolly and the ACTU, funds and peak groups – everyone who has mostly held these attacks at bay. Securing the legislated increases to the super guarantee this year was a fight we shouldn’t have had to have, but a win worth celebrating. We have won more battles than we’ve lost. And occasionally, even, a policy win – like the legislation introduced last week to remove the $450 minimum threshold for the super guarantee, which we have long supported and took to the last election as policy.
We thank you for championing this policy to protect and support those who would likely suffer the most from the falling living standards that have become a consequence of this Government’s failings – especially when it comes to low-paid working women. But you and I know, we’ve been around long enough to understand, that any victory is just another stay of execution. There’s always another attack just around the corner.
That’s why this next election is about super. It’s a referendum on whether super should be central, or sidelined. Built up or torn down. Because retirement incomes are never safe from a government in which the extremist anti-super tail wags this lightweight Treasurer. Not safe from the stagnant wages this government has said is a ‘deliberate design feature’ of its economic policies – remembering wage stagnation has a devastating impact on super balances as well.
So if the Coalition is re-elected: there’ll be more attacks on super; more attacks on wages; more attacks on Medicare; more attacks on living standards; and more attacks on the working families of middle Australia. That’s the risk attached to an eight-year-old government asking for another three years.
Super is a Solution, Not the Problem
Any objective observer knows super has been our big advantage; our economy’s saving grace. During the GFC, around 150 Australian businesses were able to secure almost $120 billion in new equity to support their growth – and almost half of that came from the super sector.
Despite the past 8 years of otherwise weak investment, super has remained a vital source of funding for our businesses and projects. In June this year, 13 per cent of APRA-regulated superannuation funds was allocated to property and infrastructure investments. That is more than $280 billion to support our fast-growing cities, suburbs and regions.
During COVID, super funds provided billions of dollars in recapitalisation and critical business credit and loans to Australian companies and private businesses, helping to absorb the economic shocks. This put downward pressure on the cost of capital for businesses, sandbagged the national economy, saving local jobs, and generated value for fund members.
Over the 12 months to June 2021, there was almost a 15 per cent increase in total superannuation assets. And in the future, Australian super assets are set to grow from $3.3 trillion today to around $34 trillion by 2060, which means from 157 per cent to 244 per cent of Australian GDP. Anyone who looks at the magnitude of this opportunity and wants to wind it back has got rocks in their head. Why would we undermine this source of business investment, dignity and
spending in retirement, and sustainable long-term growth? In 2020, Australia had the third largest pool of pension assets in the world as a proportion of GDP, ahead of the US and UK – and the fourth or fifth biggest overall.
Over the past 20 years, Australia has experienced the greatest asset growth of any pension market, growing by 11.3 per cent. Critical to this growth has been the compulsory and near-universal nature of the Super Guarantee. It means around a fifth of ASX capitalisation is currently owned by APRAregulated funds. So much more would be possible with a government which sees super at this magnitude as part of the solution to our economic challenges and not
Super and Climate Change
Today I want to talk specifically about the opportunities for super in cleaner and cheaper energy and the clean economy more broadly. We know that you invest for the long-term and that means you have a fundamental role to play here. Your primary duty is to invest in your members’ best financial interests. And their best financial interests are served by investing in business and assets that will still be profitable thirty years from now.
This means you are acutely aware of the material financial risk that climate change poses today, and over the decades to come. The RBA, ASIC and APRA all share your views. We know climate change poses a risk to the entire financial system.
Just last month the RBA warned that international investors are increasingly adjusting their portfolios in response to climate risks and that Australia risks facing increasingly higher costs in relation to emissionsintensive activities. So we have no more time to waste.
It’s pleasing to see super playing a role in climate action, particularly the industry funds. We welcome every investment in renewable projects from super, as a much-needed source of capital. We have super funds to thank for investment in WA’s largest operational windfarm, in Melbourne Airport’s recently completed onsite solar farm, and in Ausgrid’s community battery project.
More Transparency on Targets and Plans
We also know that behind the scenes, super funds have had a strong record of engaging with the companies they invest in to ensure greater transparency and accountability.
You’re making a difference. The Australian Council of Superannuation Investors has played a leading role in highlighting which companies have committed to net zero emissions and have established targets and plans to get them there. This year, the number of net-zero commitments more than tripled and now almost half of the ASX 200 has set emissions-reduction targets. This is being driven because investors, particularly the industry super sector, are demanding it. In April 2020, IFM supported shareholder resolutions that Santos and Woodside, two of Australia’s largest oil and gas producers, set short, medium and long-term targets in line with the Paris Agreement. At the end of last year, Santos announced new emissions targets, to reduce their emissions by 26-30 per cent by 2030, and to net-zero by 2040.
But despite your best efforts, we know that there’s only so much that you can do in relation to climate risk disclosure when the existing reporting framework is insufficient, inconsistent and inadequate. We agree that regulators and government should provide clearer guidance on this and what companies should be reporting – and we’ll have more to say about it. Like the RBA, we’d like to see disclosures that are usable, credible and comparable, so that there is a baseline, all around the world, that we can measure against. This will help investors make informed decisions.
Last night, the RBA’s Guy Debelle, who has been leading a lot of this work, explained that the Task Force of Climate Related Financial Disclosures (TCFDs) has got a much more detailed, usable, updated guide to disclosure that is going to be the released as part of COP26. This is likely to emerge as the standard that most countries and companies start adopting – and that’s a good thing.
Policy Uncertainty is a Handbrake on Investment
But a lack of consistent and transparent information is only part of the story. Eight years of Coalition policy uncertainty has been a handbrake on super investment in cleaner and cheaper energy. Funds cannot invest with confidence when a government cycles through 22 different plans in 8 years – the last one little more than a pamphlet. Policy uncertainty pushes up the price of finance. That pushes up the price of new projects and technology. It slows the transition. It also means super funds are increasingly needing to look offshore. So we desperately need policy stability, and clear and ambitious targets, which create certainty for super investments to follow.
Economic modelling for IGCC has shown that Australia would create $63 billion in fresh investment opportunities over the next five years by strengthening climate targets and policies in line with reaching net zero emissions by mid-century. And stronger 2030 policies can unlock $131 billion investment in clean industries and new jobs by the end of the decade.
The biggest impediment to tens of billions of dollars of investment in cleaner and cheaper energy is a Prime Minister who can’t get his head around the opportunities here and whose heart isn’t in it. So many missed opportunities to create real jobs, and real investment, in regional communities and economies. Action and leadership that we know won’t cost jobs but will create them. We know the market is there for renewable energy investments in Australia because it has been growing all around the world. And yet, we’ve been bucking the global trend. Australia is losing another race it should be winning.
S&P Global analysis indicates a passive investment in the ASX200 exposes investors to around twice the carbon exposure per dollar invested than in other major markets. Large investment funds report that if they invest in Australia at all, they
spend around 2-3 times as much capital in projects in the EU, USA and Asia than they do on Australian projects.
But these are the numbers that really stood out for me:
A recent survey of Australian investors managing $1.3 trillion found that 70 per cent of them highlighted policy uncertainty as a key barrier to investment, up from 40 per cent last year. This month, HESTA CEO Debby Blakely said, ‘while we want to invest more here, for every $1 we have invested in Australian renewables, we have $3 committed to equivalent assets overseas. The assets are in countries that provide stable, predictable policy settings, which have
given us the confidence to make long-term investments’.
The BCA also identified “policy certainty” as a key factor currently missing in Australia’s energy investment landscape.
This is a devastating vote of no confidence in Scott Morrison and Josh Frydenberg and the wasted decade of missed opportunities the Coalition has presided over.
Super Can Be Central
I know you all understand this. You know that more investment in cleaner and cheaper energy means more opportunities for more people in more parts of Australia. We need a government that understands this too. That won’t be a fourth term Coalition government led by Scott Morrison and Barnaby Joyce. A first term Albanese government would understand and unlock these opportunities.
We know super belongs at the very centre of the recovery. And that this is a key part to ensuring our economy is stronger and our energy cheaper and cleaner after COVID than it was before.
Politicians don’t want to meddle with super
Australian Financial Review
28 March 2022
Chanticleer – Tony Boyd
Superannuation was once a soft target for politicians trying to raise revenue. They have backed off in the face of changed community perceptions and super’s status as a sacrosanct saving vehicle.
It says a lot about superannuation’s changed perception in the community that politicians no longer see it as a soft target for boosting revenue.
There was a time when the Liberal-Nationals Coalition was willing to waste political capital on opposing the move to a Super Guarantee charge of 12 per cent.
Not any more.
In fact, the Minister for Superannuation, Jane Hume, tells Chanticleer in the clearest terms possible that “there will be no increase in super taxes under a Coalition government”.
“There will be no sneak tax increases via by making it more difficult to put money into super under a Coalition government,” she says.
With an eye to potentially wedging Labor over the policies it took to the last election, Hume says there will be no adverse changes to super taxes, no adverse changes to contribution limits, and definitely no changes to the government’s contribution flexibility measures.
She says there will be no changes to catch-up contributions and concessions for a couple downsizing to a smaller house to put an extra $300,000 into super.
The Coalition will not meddle with the ability of retirees up to the age of 74 to make contributions without meeting the work test.
Also, Hume says there will be no adverse changes to the Division 293 tax threshold, which imposes a $250,000 upper limit before the 15 per cent contribution tax comes into play.
Whenever Opposition Leader Anthony Albanese has been asked about Labor’s previous tax policies, he has responded with the phrase: “It is not our policy until we announce it.”
Opposition treasury spokesman Jim Chalmers tells Chanticleer: “We’ve said consistently that we won’t take the same policy agenda to this election that we took to the last election.
“All of our policies will be clearly set out before the election.”
But that is not a denial. It is pretty clear that a decision is yet to be made on these issues, which could potentially boost Labor’s revenue by multiple billions of dollars.
With about six weeks to go before the election, there is still time for Hume to wedge Albanese and Chalmers, but that pressure is most likely to be greeted with a commitment by Labor to do nothing.
Super’s ascension to a position beyond the reach of politicians seeking revenue matches changing community attitudes, which are well summed up in research by CT Group.
The research, which was commissioned by the Association of Superannuation Funds of Australia, found that super was not on the issue agenda for the vast majority of Australians.
“Australians believe that more money should be saved for their retirement, not less,” the research found.
Although many are concerned they might not have enough money saved to live well when they retire, they are also concerned that others who don’t save might become a burden on taxpayers.
Australians are happy with the performance of their super funds and there is strong support for not allowing early access to super across the full spectrum of different demographic, socio-economic and voter groups.
“The industry is viewed highly favourably, and Australians are satisfied with how the industry is performing across a range of key metrics,” the research found.
“There is high support for maintaining the legislated increase in the Super Guarantee to 12 per cent, and high support for ensuring that any additional super contributions are taken as compulsory retirement savings.”
Budget 2022: Treasurer reassures retirees as budget super tax fight looms
The Weekend Australian
26 -27 March 2022
GEOFF CHAMBERS CHIEF POLITICAL CORRESPONDENT
Self-funded retirees will be allowed to store more cash in their nest eggs to shield them against global security threats and market volatility, as Josh Frydenberg sets up a budget clash with Labor over superannuation tax.
Ahead of delivering his fourth budget and the government’s cost-of-living package, tipped to include $250 payments and a temporary cut to fuel excise, Mr Frydenberg made a pre-election pledge that the Coalition will not “increase superannuation taxes”.
Announcing an extension of the 50 per cent reduction in minimum drawdown requirements to mid-2023, impacting about 1.8 million superannuation accounts, the Treasurer said his message to older Australians was “your super is safe with us”.
“This will provide retirees with greater flexibility and certainty over their savings. We recognise the valuable contribution self-funded retirees make to the Australian economy and the sacrifices they made to provide for their retirement,” Mr Frydenberg said.
“At this election, we are again saying to retirees – under a Morrison government there will be no increased superannuation taxes.
“It’s not a guarantee Labor can be trusted to match. Labor sees success as something to be taxed, not celebrated.