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CHRIS BOWEN MP SHADOW TREASURER MEMBER FOR MCMAHON
SENATOR KATY GALLAGHER SHADOW MINISTER FOR SMALL BUSINESS AND FINANCIAL SERVICES SENATOR FOR THE AUSTRALIAN CAPITAL TERRITORY
A SUPER SYSTEM THAT’S FAIRER & A BUDGET THAT’S BETTER OFF
Today Labor proposes a superannuation reform package that is fairer than the Government’s and delivers more substantial budget repair.
The Turnbull Government’s superannuation changes have been a stuff-up from the start.
After attacking Labor’s responsible and fair superannuation reform proposals, the Government announced a rushed and flawed package in the 2016 budget.
Malcolm Turnbull’s retrospective changes undermined confidence in the retirement system and sparked another civil war inside the Liberal Party.
After caving in to George Christensen, the Government has announced a revised package which overwhelmingly benefits high-income earners, opens new tax loopholes, and fails to deliver substantial budget repair.
The Turnbull Government is chaotic and incompetent - its shambolic superannuation changes are proof of that.
The current superannuation system delivers half of all tax concessions to the top 20 per cent of income earners. That isn’t fair or fiscally sustainable.
While the Government has scrapped its flawed and retrospective changes, the current proposals do not go far enough to return fairness to the system, or to deliver substantial budget repair.
Labor’s proposed reform package will improve on the Government’s proposals by $1.4 billion over the forward estimates and $18.9 billion over the medium term.
If the Government is serious about strengthening the superannuation system and repairing the budget, it will sign up to Labor’s responsible proposals.
Labor’s superannuation reform package includes:
ï·ï Lowering the annual non-concessional contributions cap to $75,000; ï·ï Lowering the High Income Superannuation Contribution threshold to $200,000; and ï·ï Opposing the Government’s new superannuation tax loopholes.
Lowering the annual non-concessional contributions cap to $75,000
The Government’s proposal for a $100,000 annual cap on non-concessional contributions remains too generous.
Parliamentary Budget Office analysis has shown that only 0.7 per cent of taxpayers made non-concessional contributions worth more than $100,000 in 2012-13. More than 86 per cent of taxpayers made no non-concessional contributions that same year.
Labor’s proposal better targets this concession while also ensuring workers on low and middle incomes can still make substantial one-off contributions if their circumstances allow it.
Lowering the High Income Superannuation Contribution threshold to $200,000
The Government is proposing that people earning $250,000 or more a year pay a 30 per cent tax rate on concessional superannuation contributions above this amount, rather than 15 per cent.
Labor proposes to lower this threshold to $200,000.
PBO analysis estimates that less than four per cent of taxpayers would be affected by this change, which will deliver substantial improvements to the budget bottom line.
Opposing the Government’s new superannuation tax loopholes
The Government is continuing with its plans to open up new superannuation tax loopholes.
Labor will continue to oppose these new tax loopholes. It’s ludicrous for the Government to be proposing new loopholes when it should be cracking down on existing ones.
Allowing for catch-up concessional contributions and tax deductibility for personal superannuation contributions will overwhelmingly benefit high-income earners, while having a massive impact on the budget.
These loopholes will cost the budget about $12.3 billion over the next decade. This is fiscally reckless, especially given the budget is already under pressure and our triple-A credit ratings are under threat because of the Government’s economic mismanagement.
Labor will finalise its position on the Government’s legislation when it is eventually presented to the Parliament. But we urge the Government to accept Labor’s responsible proposals, and work with us to deliver superannuation reforms which are fairer and better.
Under Labor, the superannuation system will be fairer and the budget will be better off.
For more information on Labor’s superannuation package visithttp://www.alp.org.au/making_superannuation_fairer_fact_sheet
FISCAL IMPACT OF LABOR’S PROPOSALS - COSTED BY THE PARLIAMENTARY BUDGET OFFICE:
Measure Total to 2019-20 Total to 2026-27
Lower the annual non-concessional contributions cap to $75,000
20.0 1,070.0
Further lower the High Income Super Contribution threshold to $200,000
688.0 7,310.0
Oppose the introduction of catch-up concessional contributions
100.0 6,000.0
Oppose changes to tax deductibility for personal superannuation contributions 700.0 6,300.0
Interactions -70.0 -1,820.0
Total impact - Labor amendments 1,438.0 18,860.0
Total Government package 3,064.0 13,730.0
Total Budget improvement 4,502.0 32,590.0
TUESDAY, 8 NOVEMBER 2016
MEDIA CONTACT: JAMES CULLEN (BOWEN) 0409 719 879 SHARON SCRIVENER (GALLAGHER) 0412 037 573