Workplace Relations Minister Tony Burke has defended changes to taxes on superannuation, arguing tax concessions on retirement savings would soon cost more than the aged pension without intervention.
The government doubled the tax rate on super accounts with more than $3 million from 15 per cent to 30 per cent, with the changes set to come into effect from mid-2025.
Mr Burke said the changes put forward were only modest ones and necessary to lower spiralling levels of government debt.
“How can we have a situation where we keep hurtling towards a time where superannuation tax concessions cost more than this age pensions, which is where we’re heading,” Mr Burke told Sky News on Sunday.
“If you’ve got more than $3 million, good on you, you’ll still get a tax concession, it just won’t be as generous as for what it is for the 99.5 per cent of Australian balances.”
The minister said those with wealthy super balances would have the next two years before the changes kick in to reorganise their finances if they want to.
“We already have taxation on superannuation, it’s concessional, it’s already there, it’s an advantage to have your money in superannuation,” Mr Burke said.
Liberals’ legacy of debt
“People know that we do need to raise additional revenue. We’ve been left with a trillion dollars of Liberal debt.”
He also ruled out any tax changes on capital gains tax exemptions for the family.
Liberal senator Andrew Bragg has hit out at the changes, saying the government should have explored other options to bring debt levels down.
Call for indexing
“Raising taxes is the last thing they should be doing, and I just think it sends the wrong message to people that the government will pull the rug from underneath you,” he told Sky News.
“If the change was going to go ahead, it would be better if it was indexed. If it’s not indexed, then over half million people will hit by this creeping tax.”
Senator Bragg has previously argued for superannuation to be voluntary so people can choose to spend their fund as needed, rather than save it for retirement.
He said the fund would be better served by people such as first-home buyers being able to use their super to purchase a property
“If you’re a low income person, and the biggest pool of money you have is locked away in a super fund, then you’re never going to get access to a first home,” he said.
The Greens have called for a further boost on tax rates for super accounts, with the party proposing the threshold be lowered from $3 million to $1.9 million, and for the changes to come into effect from July this year.
Costings from the Parliamentary Budget Office have shown those changes would affect 210,000 people and raise $54.6 billion over the next decade.
-AAP
