The Federal Government has ruled out any major concessions on its Budget superannuation changes beyond some “life event” exclusions from the proposed $500,000 lifetime cap such as divorce settlements or accident compensation payments.
The Treasurer, Scott Morrison, has quite specifically ruled out lottery wins or major inheritances as falling within the “life events” which would be excluded from the calculation of the cap.
Speaking on national television, Morrison said he had been consulting with his colleagues and with the financial services industry on the Budget changes and believed good progress was being made, but he seemed to rule out the sorts of amendments which many believe are necessary to ensure passage of the legislation through both the House of Representatives and the Senate.
In defending the Government’s determination to hold the line on key elements of the policy, Morrison said Australia was in a situation where there were fewer working age Australians to pay taxes to support people who were beyond working age.
“For those beyond working age we have a superannuation system that means that you could have a superannuation account — $10 million — and we know there are accounts that exist like this and the earnings on that account which on a modest return would be some $350,000 in income a year and the tax paid on that is zip, zero and nothing,” he said.
“Now, that sort of a system is not sustainable given the aging of the population and the challenges we have going forward.”
Morrison said that was why it was necessary to make the rather broad changes the Government was making.
“…we have targeted them very clearly at those who sit at the top end of the income and the wealth system in the country,” he said.
