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Andren urges greater equity in super.



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Peter Andren MP - Independent Member for Calare

19 June 2003

Andren urges greater equity in super

The Coalition’s move to reduce the superannuation surcharge for high income earners, including MPs, is a tax break for those who least need it, according to Peter Andren, Member for Calare.

A bill to reduce the superannuation surcharge for high-income earners from 15% to 10.5% by 2005 passed the house today and will come into effect once it passes the Senate.

“The government introduced the surcharge in 1996-97 to make the super system fairer, but now they are backtracking, giving a tax break to those who need it least,” Mr Andren told Parliament.

“Because the richest are more able to use negative gearing, overgenerous capital gains arrangements, trusts and property investments to maximise their incomes, the 15% surcharge was designed to equalise the system, and raise revenue of course.

“Reducing the surcharge denies the government revenue that could be used to help subsidise savings for lower and middle income earners who are likely to be a huge pension cost in the near future.

“I accept that the surcharge double-taxes high income earners, but it was brought in to make the system fairer and should remain.

“I know the surcharge is hitting more people than it was intended - some 400,000 more - many of whom can’t afford it, like the Calare police officers who wrote to me last year.

“But they were hit because of technicalities in the way their retirement pensions are calculated, which pushed them over the income level with no actual pay increase. This anomaly should be addressed but it is no argument for a reduction in the surcharge for all earning over $90,000.

“These changes will also deliver a tax break for retiring MPs who qualify for an already outrageous super package.

“Those MPs who qualify enjoy a taxpayer funded contribution equivalent to around 65% of their salary which compares with the 9% employer contribution for other workers.

“The Assistant Treasurer is on the record saying recently that people should be able to do what they like with their savings. I challenge her to lobby in support of my freedom of choice bill for MPs’ super when I reintroduce it later this year,” Mr Andren said.

“MPs should apply the same rules to our own super as we legislate for our constituents - a fully-funded super scheme with the same employer contributions for all.

“That would be an indication this Parliament is fair dinkum about superannuation reform,” Mr Andren told parliament.

For more information: 02 6332 6229 or 0419 612 891.

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