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TES highlights the need for action on superannuation tax concessions



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CHRIS BOWEN MP SHADOW TREASURER MEMBER FOR MCMAHON

JIM CHALMERS MP

SHADOW MINISTER FOR SUPERANNUATION AND FINANCIAL SERVICES SHADOW MINISTER FOR SPORT SHADOW ASSISTANT MINISTER FOR TRADE,

INVESTMENT AND PRODUCTIVITY MEMBER FOR RANKIN

TES HIGHLIGHTS THE NEED FOR ACTION ON SUPERANNUATION TAX CONCESSIONS

The release of the 2015 Tax Expenditures Statement (TES) today by the Commonwealth Treasury reconfirms the need for urgent action on reining in superannuation tax concessions.

The TES shows that with the exception of the capital gains tax discount for an individuals’ main residence superannuation tax concessions - both contributions and earnings - are the largest Commonwealth tax expenditures and are expected to deliver a $37 billion annual cost to the budget within four years.

The TES also shows that tax concessions on superannuation earnings - an area the Treasurer seems blind to acknowledge there’s even a problem - are amongst the fastest growing tax concessions in the budget.

This is exactly why Labor in April of last year announced its detailed plan to rein in unsustainable superannuation tax concessions.

Yet we have seen no action from the Government with the Treasurer Scott Morrison who has been dragging his feet on this issue.

The Treasurer likes to lecture people about the cost and the unsustainability of the aged pension.

Yet the TES shows that superannuation earnings concessions are expected to grow by more than double the rate of the aged pension over the next four years.

Superannuation tax concessions are not only unsustainable but are inequitable with almost 40% of all superannuation tax concessions accrue to the top 10 per cent of income earners.

Concessions on superannuation earnings are expected to grow by 33 per cent over the next four years compared to just 14 per cent for the age pension over the same period.

The TES data reiterates Labor’s argument, that urgent action is required to address inequity with both the contributions and pension phase. The fact is, that the pension phase is seeing significant revenue leakage too, with big super balances - designed for estate planning rather than supporting retirement - enjoying tax free income streams.

The Government needs to take Labor’s lead and deliver reform to superannuation concessions without any further delay.

FRIDAY, 29 JANUARY 2016

MEDIA CONTACT: JAMES CULLEN (BOWEN) 0409 719 879 MITCHELL WATT (CHALMERS) 0 427 532 705