The Federal Government is close reaching a landing point on superannuation policy, according to Federal Treasurer, Scott Morrison, with there being a need to better target tax concessions.
Morrison told the SMSF Association national conference in Adelaide that the “limited headroom” in the Budget meant that the Government was going to make hard decisions about the superannuation tax concessions regime and the manner in which it is being targeted.
In doing so, the Treasurer suggested a regime which would see concessions targeted “towards those who are more likely to be most reliant on the age pension in retirement”.
He said there was a need to weigh up the value of the tax concessions against the benefits of personal and company tax cuts and, in doing so, he said it was necessary to look at the distribution of the concessions across income groups and the reality that a substantial amount was going to upper income earners.
“High income earners have a greater capacity to save and this is a good thing,” Morrison said.
“However it does raise questions about the purpose of the tax concessions.”
However the Treasurer totally ruled out seeking to emulate Labor Party policy by taxing super in the retirement phase, claiming this would represent retrospectivity by stealth.
“It may not technically be retrospectivity but it feels that way,” Morrison said.
The Treasurer also reiterated the Government’s determination to prevent superannuation being used as an estate planning tool, claiming such practices were definitely not consistent with the objectives of the tax concessions.
He also signalled the Government was prepared to provide more flexible concessional contribution cap arrangements for those with broken work patterns.
