The Federal Opposition has proposed further to tighten superannuation tax concessions in its reform package, which it says will deliver $1.4 billion in savings over the forward estimates and $18.9 billion over the medium term.
Shadow Treasurer, Chris Bowen, said in a statement that the current super system provided half of all tax concessions to the top 20 per cent of income earners, and said it was not fiscally sustainable.
“Malcolm Turnbull’s retrospective changes undermined confidence in the retirement system and sparked another civil war inside the Liberal Party,” Bowen said in a statement.
“After caving into George Christensen, the Government has announced a revised package which overwhelmingly benefits high-income earners, opens new tax loopholes, and fails to deliver substantial budget repair.”
Labor has proposed to lower the annual non-concessional contributions cap to $75,000, saying the Government’s proposal for a $100,000 annual cap on non-concessional contributions were still too generous.
It also noted Parliamentary Budget Office (PBO) analysis, which showed 0.7 per cent of taxpayers made non-concessional contributions worth more than $100,000 in 2012/13, while 86 per cent of taxpayers made none.
Labor also proposed that those earning $200,000 or more a year should pay a 30 per cent tax rate on concessional superannuation contributions rather than 15 per cent, down from the Government’s $250,000. Labor added less than four per cent of taxpayers would be impacted by this change.
Labor also opposed allowing for catch-up concessional contributions and tax deductibility for personal superannuation contributions, arguing this tax loophole would mostly favour high-income earners, and would cost the budget around $12.3 billion over the next decade.
The PBO’s costing of Labor’s proposals showed it would save $4.5 billion to 2019/20 and $32.6 billion to 2026/27.
