The Federal Government has been warned that any move in the Federal Budget to increase the superannuation contributions tax on high income earners will simply represent a reincarnation of the superannuation surcharge.
The Small Independent Superannuation Funds Association (SISFA) has made the accusation at the same time as questioning the intentions of the Government in imposing a wealth tax on high income earners who make superannuation contributions.
Commenting on the move, SISFA chair Michael Lorimer said that if the move proceeded in the Budget, it would "clearly (be) a disaster and really is just the surcharge reincarnated".
"Although it is proposed to only apply to high income earners, the reality is that the costs of administering such a system will be borne by all super fund members, regardless of their balance or income," he said.
Lorimer claimed the damage done to the perception of superannuation by such a measure would be much higher than the tax actually collected.
"Will it only be a matter of time before people earning less than $300,000 a year will also have a higher contributions tax?" he asked.
"This Government and future governments have to get over seeing superannuation and voluntary contributions as some cash cow that can be raided when other revenue channels are reduced. People have to believe that super is worthwhile and have confidence in the system," Lorimer said.
"And, on top of new rules, we are still awaiting a final announcement on the structure for over-50s' contributions from 1 July 2012," he said.
