Last night’s Q&A appearance should (but won’t) spell the death knell for Treasurer Joe Hockey.
On virtually all issues, the Treasurer was ham-fisted. While there are many examples of bumbling, Hockey’s discussion on negative gearing (see my earlier post) and superannuation concessions were amongst the most embarrassing.
After an audience member asked the following question on superannuation:
Retired baby boomers like me are consuming far too much of the Government pie and depriving younger people of essential services such as education, childcare, disability and public transport.
A wealthy retired person can have $12 million in superannuation, pay NIL income tax, and actually receive an ATO tax refund of $250,000 in franking credits.
What specific measures relating to superannuation concessions should be taken to restore fairness and sanity to the present ridiculous tax system?
Joe Hockey talked complete gibberish, stating that superannuation concessions overwhelmingly favouring the wealthy were not “middle class welfare” and that superannuation concessions are “their money. I’m always cautious about taking their money away from them”.
Does Mr Hockey not understand what a tax concession is? And if he is so concerned about taking people’s money away from them, how does he justify the hefty income tax increases that will be levied on younger workers to support the generous benefits for older generations, including through tax free superannuation to over-60s?
Shadow Treasurer, Chris Bowen, was better (but hardly great). He at least acknowledged that superannuation concessions overwhelmingly benefit higher income/wealthier Australians, noting that 30% of concessions accrue to the top 10% of earners, which does not take pressure off the Aged Pension.
The Grattan Institute’s John Daley was, by contrast, excellent. He noted that a typical 65 year old pays less tax today than a decade ago and that superannuation has become a tax shelter for the top 20%. He also called for the contributions limit on super to be dropped to $10,000 and to tax over-65’s super earnings at 15% (the same as the general population).
Daley also sensibly argued that Aged Pension reform should focus on tightening eligibility (means testing), rather than cutting the rate, which would harm more vulnerable oldies.
Overall, another poor effort by Hockey, who was shown to be out of his depth and schooled by the other panelists.