Opposition warns Australia’s self-financed retirees about work retirement plans

Australian opposition leader Peter Dutton has warned that Labor’s plan to raise old-age pension taxes will be “harmful” to Australians’ retirement plans.

The comments come after Treasury Secretary Jim Chalmers hinted at a superbalance cap of more than $3 million in the May budget, which he said would make the superconcession more “affordable and sustainable.” It’s a thing.

The policy, if implemented, is expected to affect less than 1% of Australians with over $3 million in supermarkets. Chalmers pointed out that the average balance for people in that higher category is about $5.8 million.

“When the money runs out, they will chase your money.”

Dutton argued that self-funded retirees, partial pensioners, and those looking forward to retirement would also struggle if Labor increased the superannuation tax.

Opposition leaders have warned that the government will target the wealthiest retirees before demoting them.

“They just come back to the well, and suddenly you’re a few steps down, and people you didn’t think were in line will have to pay extra taxes. Said 2 GB radio on Thursday morning.

Dutton said people who work hard and put their money into retirement “do not want the government to change the rules and retroactively tax them effectively.”

“People could have gotten the windfall from selling their homes, inherited some money, or sold a small business and diverted the money into an old-age pension,” he said. . told reporters February 22, Aston, Victoria.

“In that scenario, if they invested in stocks or portfolios that went up significantly in value, they did it by the rules and they did it because they wanted to support their retirement.”

Dutton added: When they run out of money, they will chase your money.

“I think the changes they are proposing to superannuation will have a negative impact on people’s retirement plans.”

In Australia, employers pay 10.5% of their earnings to workers’ retirement pension funds. This is normally subject to 15% tax.

On the other hand, the tax rate for over-contributions up to $27,500 per year is 15%, and above that is 30%.

Workers ensured no major changes to retirement tax

But Prime Minister Anthony Albanese on Wednesday insisted Labor would not make any major changes to retirement benefits in next May’s budget.

“We said during the campaign that we weren’t going to make any major changes to our retirement pension, and we won’t,” he said.

The Australian Retirement Pensions Council, the country’s peak superannuation lobby group, has endorsed a $5 million cap on the superbalance, which is projected to affect approx. 11,000 people.

Meanwhile, the Grattan Institute has demanded a tax threshold of $2 million for super earnings. That means people have to pay more taxes on funds above that amount.

Treasurer Steven Jones said he wasn’t choosing self-administered units to attack.

“However, it is timely to discuss what retirement with dignity means in the context of sustainable retirement schemes,” said the SMSF Association, the body representing Australia’s self-managed superfund sector. he said at the meeting.

Speaking at the Retirement Pensions Conference on Monday, Mr. Chalmers said the purpose of a retirement pension is “to maintain savings to provide a dignified retirement income.”

He subtly criticized the Morrison government’s decision to allow Australians to withdraw up to $20,000 in super over two years to deal with economic hardships during the COVID-19 pandemic. Up to $36 billion has been withdrawn.

“With so little consultation and consideration, Australians were forced to choose between increasing their retirement income or paying their bills,” Chalmers said.

“Funds have been forced to liquidate their assets and $36 billion of Australian retirement savings has been lost.

“Our government will take a different approach.”

But Rep. Barnaby Joyce said the coalition’s move was necessary during the economic crisis.

“They want to buy their own homes. Many want their own businesses. I don’t think it should,” he told Sunrise.

AAP contributed to this report.