By Mike Taylor
The Prime Minister, John Howard has ruled out further cuts to the taxation regime applying to superannuation during the life of the current Parliament.
Howard used an address to the Investmentand Financial ServicesAssociation in Canberra this week to make clear that having delivered the abolition of the superannuation surcharge in May’s Budget, the Government was not prepared to deliver further tax reductions.
He pointed to the Government’s expansion of the co-contribution regime and its abolition of the surcharge and said he recognised that the industry would have liked the Government to go further.
“I know that there are many further reforms that you would like made. I know that you would like to abolish all tax affecting superannuation,” Mr Howard said. “I have to regrettably inform you that I don’t think we’ll be able to manage that during our current term.
“But savings is a very important goal of the Government,” he said. “Private savings we encourage by reducing high rates of marginal tax.
“I think the tax changes in the last Federal Budget will not only be important to people for take home pay [levels], but I think they will provide additional incentives for people in the middle and higher brackets to save,” the Prime Minister said.
