Coalition to axe Labor's super laws

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The new government intend to undo some of Labor’s plans to impose higher taxes on earnings from superannuation pension funds.

Later today, Treasurer Joe Hockey and Assistant Treasurer Arthur Sinodinos will outline plans to scrap seven proposed changes to the tax ­system, according to The AFR.

This includes dropping the proposed tax on superannuation pension earnings above $100,000.

The changes follow a review of almost 100 tax changes announced by the previous government and not ­legislated.

The government will proceed with just 18 of 92 unlegislated and unresolved tax and superannuation changes dating back to 2001, The AFR reports.

Other outstanding tax changes include proposed changes to the taxation of trusts and to managed investment trusts.

While the Treasury is expected to announce the new changes today, it has already set the wheels in motion to have a two-year pause in the increase in the rate of the Superannuation Guarantee (SG) and repeal the low income superannuation contribution under the Minerals Resource Rent Tax Repeal and Other Measures Bill 2013.

But the Association of Superannuation Funds of Australia (ASFA) disagrees these changes should go ahead.

Its recent submission to the government makes it clear ASFA supports the current scheduled increases in the rate of the SG and does not support the proposed two year pause, as it will impact on retirement quality of a large proportion of Australians.

The association is particularly concerned the removal of low income superannuation contribution will have a significant impact of the quality of retirement for many low income Australians, particularly women.

“Increasing the rate of compulsory contributions as originally proposed is, we believe, also important to maintain the confidence of Australians in the certainty of future superannuation arrangements," said ASFA CEO Pauline Vamos.

“In this context, survey evidence indicates that both superannuation and the prospective adequacy of retirement incomes have become ‘top of mind’ topics for most Australians.”

ASFA pointed to a recent survey of around 1000 adult Australians which indicated 78% of the adult population support the increase in the rate of SG. Just over 50% of respondents opposed, to some degree, any delay in increasing the rate of the SG.

 

  • Alistair on 6/11/2013 10:03:32 AM

    As usual those that have a self interest in the equation will shout the loudest but to do so without thought being part of the equation is like letting your mouth run fast forward with the brain on rewind.
    A government needs to govern and govern for all. Imposing costs on business including a super increase will only cause further harm to business particularly small business. Hence a pause not an elimination of the idea of an increase will be a good thing.
    It will enable costs to be contained and employment to be encouraged. This is surely a good thing including the women who according to ASFA needs help. Well hey what about the concept of encouraging part time workers to have more hours and more income because of a growing business. Now there's an idea.
    Govern for all not just some. Perhaps the folk at ASFA need to come down from the cross and hang out with those running small businesses. I have an idea, what about visiting with the FP industry members drowning under a sea of paperwork and saying to these folks that their costs of employment need to rise and rise now.
    Get it ASFA !!!!!

  • Merv Gay on 6/11/2013 10:11:21 AM

    What about the employees themselves making compulsory contributions to their own super and build that to nine per cent over the next nine years, AND make the contributions tax deductible. Now wouldn't that make a healthy Futures Fund!

  • carl on 6/11/2013 10:30:36 AM

    Don't agree with Pauline and AFSA. Alistair and Merv are in line with my thinking. Self responsibility seems to be a thing of the past, let's get back to it and let's have this pause to get the business environment right before we get selfish about the individuals with respect to super down the track.

  • alleycat on 6/11/2013 10:49:49 AM

    Dear Merv,
    A good concept that needs to be refined.

    Sure, if employees contribute 3%-4% above employer supported contributions, the way to give an incentive to lower paid workers as well as the higher income earners is to give everyone a 30.0% tax deduction.
    Everyone wins including the government.

  • Merv Gay on 6/11/2013 11:01:55 AM

    Well if you expand on my comments, it reminds me of an address give by someone years ago who said that if from the date of starting work, EVERYONE had 10% deducted from their pay and banked into a fund until retirement, then social welfare would not have to include retirement costs (age pensions) in its tax funding. Made sense to me then and makes just as much sense today. If only we had bright people in government......dream on Mervie....

  • Brian on 6/11/2013 1:09:14 PM

    Find a way to merge the age pension and superannuation so that everyone participates in both. Why should those who don't plan for retirement be subsidised whereas those who make provision are considered self funding and get nothing. Contribution is the key.If the contribution base broadens there will be no need to tamper with additional tax deductions

  • Mark Thompson on 6/11/2013 1:16:49 PM

    Get rid of the Long Service Leave liability and transfer some of it to extra cash and extra SG. Ditch the 10% Rule that stops people topping up via Concessional Contributions (only created for the benefit of ISFs).

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