The assistant treasurer, Mal Brough, has rejected Labor’s call for a phasing out of the contributions tax for people earning $40,000 to $100,000 a year, stating that any such move would “introduce massive complexity and extra costs for the superannuation industry”.
The Opposition spokesman on superannuation, Senator Nick Sherry, on Monday used a doorstop news conference to claim that tax on superannuation had “skyrocketed” from about $1.5 billion 10 years ago to over $5 billion this financial year.
He said that in circumstances where the Government had effectively halved tax on superannuation contributions for high income earners in the last Budget, it should be looking to do the same for middle income earners in this year’s May Budget statement.
“Yet again, middle Australia has missed out and Labor argues that in any tax cuts, any tax package in the May Budget, there should be some cut, particularly for middle Australia to the taxes on their superannuation,” he said.
In a move that places the Labor Party at odds with a number of major trade unions, Senator Sherry said the party would not countenance increasing the compulsory 9 per cent superannuation guarantee and that targeted tax cuts for middle Australia represented a better way to go.
Brough said yesterday that Labor could not be trusted on superannuation.
“Given that Labor went to the last election with a policy to reintroduce the superannuation surcharge and to abolish the superannuation co-contribution for low income earners, people are entitled to assume that is how they will fund this latest policy,” Mr Brough said.
According to Brough, Government initiatives already introduced to lower its tax take, including the abolishment of the superannuation surcharge for higher income earners, will save Australians $15.9 billion in 2005-06.
