Australia’s centre-left Labor government is looking for ways to improve the bottom line of the budget and is considering cutting retirement tax incentives for Australians with high retirement savings.
Speaking at the Australian Financial Review Super & Wealth Summit on 8 November, Financial Services Minister Stephen Jones said the federal government would bring up the debate on tax incentives after enacting the purpose of the superannuation system into law.
“We start with the proposition of what is right, not what war is.” He saidreported by the Australian Financial Review.
While noting that tax cuts to superfunds were used to reduce federal tax revenue and accumulate wealth, the minister said the government had not decided how much superannuation was too much.
“I’d like to start with the suggestion that we’re going to have a really hard time convincing the government that the $100 million (US$65 million) retirement savings balance is all about retirement savings.” He said.
Mr Jones also said there are 32 self-managed super funds in Australia with over $100 million in assets, with the largest being worth over $400 million.
“While I celebrate success, concessional taxation of funds like this represents a real loss to the budget, which needs to be considered.” He said.
In Australia, ultra-preferential tax regimes exist to encourage people to save for their old age rather than relying on old-age pensions that burden government finances.
under Current lawretired Australians with over $1.7 million in super can put their surplus funds into savings accounts.
These funds 15 percent This is well below the top marginal income tax rate of 45%.
Industry response to super tax cuts
Some groups in the supermarket industry support the idea of imposing limits such as $5 million on people’s supermarket balances.
AustralianSuper CEO Paul Schroder says a person with $5 million in a Super account could earn $325,000 annually with an annual return on investment of 6.5%.
“We have a lot of multi-million dollar members in the fund, so I apologize to each one of them for what I’m about to say, but rebalancing the tax structure is good for society. .” schroeder saidreported the Australian Financial Review.
Some super experts have gone further and suggested that the Labor government limit super balances to $2 million.
Meanwhile, H&R Block tax expert Mark Chapman said it was unfair for the government to continue messing around with retirement plans.
“People have been paying their supermarkets under a set of rules for decades, and it makes sense to assume that these rules will continue to apply even in the Super Age.” he said in a comment obtained by AAP.
Nonetheless, Chapman said a $5 million superlimit is reasonable to repair the federal budget given the increasing government debt.
Opposition Financial Services spokesman Stuart Robert did not respond to the Epoch Times’ request for comment.
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Alfred Bui is an Australian reporter based in Melbourne, focusing on local and business news. He is a former small business owner and holds his two master’s degrees in business and business law. Please contact [email protected]