The Association of Superannuation Funds of Australia (ASFA) today welcomed the Abbott Government's announcement that it will not be proceeding with the tax on superannuation earnings over $100,000.
ASFA CEO Ms Pauline Vamos says uncertainties regarding the way the tax would be calculated and applied were concerning for many people, particularly retirees and those approaching retirement.
“When the measure was first announced, the Australian community expressed concern that the tax may be applied to retirees with relatively low account balances, particularly given that returns can fluctuate quite dramatically at times.
“Not proceeding with this policy, alongside the Government's commitment not to make any detrimental, unexpected changes during this parliamentary term, will deliver certainty for people planning for their retirement,” Ms Vamos said.
However, Ms Vamos says there is still a conversation to be had regarding the appropriate tax policies to apply to retirees with very high account balances amounting to millions of dollars.
“The average Australian may think it unfair that all income in accounts with very high balances be tax-free throughout retirement,” Ms Vamos said.
Additionally, she said that there needs to be further discussion around the taxation of super contributions for low-income earners, given the Government's stated intention to remove the Low Income Super Contribution (LISC).
“The LISC is good public policy as it offsets the 15 per cent tax applied to superannuation for those on very low incomes, who would otherwise receive the income tax-free. Given that the Mineral Resources Rent Tax (MRRT) is set to be repealed, it's important we look at alternative ways to fund this initiative in the budget process,” Ms Vamos concluded.
For further information, please contact:
Lisa Chikarovski, Media Manager, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia's superannuation industry. It is a not-for-profit, sector-neutral, and non-party political national organisation whose aim is to advance effective retirement outcomes for members of funds through research, advocacy and the development of policy and industry best practice.