Super tax concessions necessary for growth
Superannuation industry figure Barbara Smith has on the eve of the Federal Budget urged Treasurer Peter Costello to remove some of the taxes on super funds because they are preventing them from generating sufficient retirement income streams.
Smith’s suggestions include a reduction of the tax on superannuation funds, the removal or increase of the Reasonable Benefit Limit to reflect the impact of inflation on incomes and investment property values and the complete removal of tax on annuities and allocated pensions.
She also points out that while income and company tax rates have been reduced, super funds are the only entities not to have received a tax cut since the 15 per cent tax on super funds was introduced in 1988.
“Instead of encourage people to provide for their own futures and become independent of Government pensions, the Government is double, triple and even quadruple taxing superannuation and not taking into account why compulsory super was introduced in the first place,” Smith says.
“At the same time all Australians have been subject to bracket creep on their income which is limiting their ability to save and netting the Government a huge windfall in taxation revenue.”
Women are also specifically at risk of poverty in retirement, and despite repeated warnings, Smith says, the Government has not acted on this issue.
Smith, who was formerly technical director ofTaxpayers Australiaand executive director of Superannuation Australia, has recently been appointed chief executive and executive director of Online Super.
During her time at Taxpayers Australia she wrote the DIY Superannuation Manual and quarterly DIY Superannuation Journal. She also wrote theCPAPersonal Financial Planning and Superannuation Program for Certified Practising Accountants and sits on various superannuation committees with theAustralian Tax Office.
Smith has also written more than a dozen books on superannuation, tax and retirement strategies, with a specialisation in self-managed super funds.
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
