Super surcharge cut blocked in Senate
The Government’s attempt to pass its controversial Superannuation (Surcharge Rate Reduction) Amendment Bill 2003 through the Senate was shot down by Labor last night, which branded the proposal “a blatantly unfair tax cut” exclusively benefiting only 5 per cent of working Australians.
The Bill, aiming to reduce the superannuation surcharge from 15 per cent to 10.5 per cent over three years, was defeated by 33 votes to 27.
Labor Shadow Minister for retirement incomes and savings, Senator Nick Sherry put a motion forward, which too was defeated, that the Bill in fact be withdrawn or at least amended to “cut the contributions tax for all Australians, a fairer approach, particularly at a time of negative returns, to boost the retirement income for all Australians and assist the Nation in preparing for the ageing of the population”.
“The proposed surcharge tax reduction to high-income earners is an exclusive tax cut to those earning greater than $90,500 surchargeable income with the greatest benefit going to those on an income greater than $109,900 with the result that it assists only the highest five per cent of income earners,” Sherry says.
However, Assistant Treasurer Helen Coonan defended the notion that the Bill was simply a tax cut for the rich.
“Higher income earners will still be paying significantly higher rates of tax and surcharge once this measure has been passed, than other income earners,” Senator Coonan says.
Sherry argues that a much fairer motion would be to reduce the general super contribution tax rate of 15 per cent down to 13 per cent.
“We have costed it [the general tax reduction] and it’s still within a balanced budget. However the biggest problem for super at the moment is there has been a significant decline in confidence - at a time of negative returns we need to cut the tax for all Australians to restore confidence,” Sherry says.
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
