The Federal Government’s changes to the tax settings in the forthcoming Federal Budget are expected to ultimately amount to a broadening and pull-forward of the measures it announced last year.
The Government last year announced that individuals with incomes greater than $300,000 would have the tax concession on their contributions reduced from 30 per cent to 15 per cent, but has failed to actually implement the change.
With the superannuation industry and elements of the Australian Labor Party urging against further unnecessary tinkering with the superannuation tax settings, the Government is now being tipped to simply broaden the approach announced in the last Budget and to impose a start date to 1 July, this year.
The question most testing the superannuation industry is whether such a change would see the threshold lowered beyond $250,000 a year.
The continuing speculation around how the Government will handle the superannuation changes in the Budget has come at the same time as senior Government ministers including Trade Minister, Craig Emerson, have sought to reinforce that “ordinary” Australians will not be targeted.
Speaking to reporters over the long weekend, Emerson said Labor wasn’t considering any super changes that would affect small business owners or ordinary Australians struggling to make ends meet.
'’People who are fabulously wealthy gaining effectively an advantage by putting their money into superannuation and being taxed at 15 per cent, where the everyday Australian may be facing a tax of 30 per cent, I think does enliven a debate,’’ he said.
“'We are not seeking to impose new taxes on the superannuation accounts of ordinary Australians,” he said.
The Prime Minister, Julia Gillard, has emphasised the Government’s desire to ensure the superannuation system remains sustainable.
