The financial services industry is increasingly bracing itself for the Government to target the top 12 per cent of Australian income earners with tax changes to superannuation in the May Budget.
There are concerns that the Government might move so far as to reduce the threshold at which the increased 30 per cent contributions tax kicks in from $300,000 to as little as $180,000 a year.
The industry is also expecting that if a Coalition Government gains office at the scheduled 14 September Federal election it will not be moving immediately to reverse any of the Government tax changes to superannuation.
The Shadow Assistant Treasurer, Senator Mathias Cormann, has told Money Management that the Coalition's actions will be governed in large measure by the state of the Budget it inherits.
The expectation that the Government will target upper-income earners gained momentum yesterday when the Prime Minister, Julia Gillard, refused to rule out such a move, saying the Government had to make sure "the system is sustainable and is meeting the nation's needs and the needs of individuals".
A number of pre-Budget submissions, including that of the Australian Institute of Superannuation Trustees, have argued that superannuation tax concessions are best targeted towards lower and middle-income earners.
The Association of Superannuation Funds of Australia yesterday restated its position that upper-income earners were not receiving an excessive amount of Government support with respect to their retirement incomes.
Cormann has continued to describe any move to target upper-income earners in the Budget as "class warfare"
"The Government should leave people's superannuation alone," he said. "People doing the right thing by saving for their retirement deserve certainty and stability in super policy and tax settings so they can plan their future with confidence."
