Labor has announced a policy that will ensure Australia’s retirement savings system is fair and sustainable into the future, Terri Butler MP said.
“Saving $14.3 billion over 10 years, these changes are good for fairness and they are good for the Budget,” Terri Butler said.
“A fair and sustainable superannuation system will protect living standards in retirement and take pressure off the age pension.
“At the moment, 10 per cent of Australians receive 38 per cent of all superannuation tax concessions,” Terri Butler said.
Labor will bring fairness back into the superannuation system by ensuring earnings over $75,000 are taxed at a concessional rate of 15 per cent in the retirement phase, instead of being tax free.
The tax-free status of all superannuation earnings, introduced by the Howard Government in 2006, disproportionately benefits high income earners and is unsustainable.
This measure will affect approximately 60,000 account holders with superannuation balances in excess of $1.5 million and save around $9.2 billion over 10 years. This measure will not impact pensioners or part pensioners.
In addition, Labor will lower the threshold on the High Income Superannuation Charge from $300,000 to $250,000 a year. This measure will better align tax concessions received by those on very high incomes with those on average incomes and will save an estimated $5.1 billion over 10 years.
Instead of a 30 per cent tax concession, those earning more than $250,000 a year will receive a 15 per cent tax concession on contributions.
“If we are elected these are the only changes Labor will make to the tax treatment of superannuation,” Terri Butler said.
“Obviously we want to see what more we can do to close the gender gap in retirement savings.
“Together with Labor’s crackdown on multinational tax minimisation, these changes will return more than $20 billion to the Budget over the decade.
“This shows how Labor will responsibly manage the Budget without stifling economic growth or cutting billions of dollars from pensions, health and education like Tony Abbott and Joe Hockey want to do,” Terri Butler said
Labor’s plan to make Australia’s retirement savings system fair and sustainable has been fully costed by the independent Parliamentary Budget Office.