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Friday, 16 December 1983
Page: 4018

Question No. 248


Senator Messner asked the Minister representing the Treasurer, upon notice, on 3 June 1983:

(1) Are small businessmen linked to a $1,200 tax deduction for contributions they make to superannuation funds, payments from which will be subject to the new 'super tax'.

(2) How can employees operating contributory superannuation schemes, obtain tax benefits which, together with the $1,200 rebate theoretically obtainable by employees for their contributions, amount to far higher (perhaps three or four times more) tax subsidies than are available to the self-employed.


Senator Walsh —The Treasurer has provided the following answer to the honourable senator's question:

(1) The income tax law allows a self-employed person or an employee without employer-sponsored superannuation support an income tax deduction for his or her contributions to a qualifying superannuation fund up to an annual limit of $1, 200. Benefits from such a superannuation fund, to the extent to which they are referable on a time basis to membership of the fund after 30 June 1983, will be subject to the new taxing arrangements.

(2) The honourable senator seems to be asking why income tax deductions available for contributions to a supperannuation fund by an employer for the benefit of an employee can be much higher than the deduction for such contributions available to an employee who has to make his or her own superannuation arrangements. The former contributions are, of course, deductible to the employer as part of the overall remuneration payable in respect of the employment of the employee, are part of the costs of derivation of the employer' s income and are funded in accordance with guidelines which reflect the employer -employee relationship. The latter contributions have no direct relationship to the derivation of the taxpayer's income and the deduction of up to $1,200 represents a concession under the income tax law which would not otherwise be available to assist unsupported employees and self-employed persons to provide for retirement. As the honourable senator would know, the level of concessions of this nature under the income tax law are subject to budgetary considerations.