TheFinancial Planning Association(FPA) has today voiced strong opposition to the Labor party’s announcement that it would oppose the Government’s plans to cut the rate of the superannuation surcharge.
FPA senior manager of public policy Con Hristodoulidis says Labor’s opposition to the cut in the surcharge is disappointing, particularly given the FPA’s preferred position is for the surcharge to be abolished altogether.
The leader of the opposition, Simon Crean, announced last night the Labor party would vote against the Government’s proposal to cut the surcharge rate from 15 to 10.5 per cent.
The proposal, announced by the Government at the last election, was confirmed in this week’s budget.
“We are a little bit disappointed in the ALP given the Coalition announced the policy as part of its election promises and the Australian public had a chance to vote on it,” Hristodoulidis says.
According to Crean, the opposition would instead push for an across the board cut in the tax on superannuation contributions from 15 to 13 per, or a cut in the tax to 11.5 per cent for people aged over 40 as an alternative to the surcharge reduction.
The Labor party’s opposition to the surcharge cut follows a pledge by the Democrats this week not to support the policy in the Senate, effectively torpedoing the Government’s plans.
Democrats spokesperson on superannuation Senator Lyn Allison says the problem with the surcharge is that it is an administrative nightmare for superannuation funds, not that it is charged at too high a rate.
The Democrats are also likely to frustrate the Government’s renewed attempts to introduce choice of superannuation fund, a policy the Government committed $28.7 million to in this week’s budget.
Before last year’s election, the Democrats rejected the Government’s choice proposals in the Senate after the Government refused to give same-sex couples equal rights under superannuation laws.
“We’ve had no progress from the Government on our bottom-line, that is, that discrimination against same-sex couples be resolved by legislation. [Without this], we are not interested in supporting choice of fund,” Allison says.
