Lifetime super cap could cost taxpayers

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A proposal being floated as a potential savings on the cost of superannuation could end up actually hurting taxpayers, it has been claimed.

The Parliamentary Budget Office has said a proposal to put a lifetime cap on superannuation could cost taxpayers more, the ABC has reported. According to the ABC, Greens treasury spokesman Adam Bandt said lifetime superannuation contribution caps were currently being considered by the Treasury. The measure has been proposed to stop people nearing retirement from funnelling money into superannuation in order to minimise tax.

But Bandt said the proposal would only save about $165m over four years, while the cost of super tax concessions as a whole is set to be $170bn over the same period.

"We're concerned that the PBO costings suggest that if you put the cap any higher than $500,000, it might actually cost the budget money. Now that would be an extremely counter-productive thing to do," Bandt said.

Bandt said he was still open to the idea of a lifetime cap on superannuation, but that more significant savings would come from aligning superannuation tax rates more closely with income tax rates.