The Abbott Government continues to be all over the shop on retirement policy.
With the Budget in long-term structural decline, and superannuation concessions projected grow by a whopping 10.8% per annum between 2014-15 and 2017-18 to some $49 billion, the Coalition has criticised Labor’s modest proposal to reduce super concessions enjoyed by higher income earners as a “new tax”:
“It seems that every new policy that the Labor Party has is a new tax,” [Parliamentary Secretary Alan] Tudge told Sky News.
“You’ve got to be very careful about changing the rules in superannuation midway through because people made decisions to put extra money into superannuation accounts based on a certain set of rules…
“We want to bear those in mind and we also want to make sure if you are making any adjustments to super, you have to consider that in the context of how it impacts with the tax regime and how it impacts with the aged pension system as well.”
Of course, the Coalition had no problem “changing the rules in superannuation midway through” in the 2000s when it allowed former Treasurer, Peter Costello, to grant tax free superannuation status for retirees (over 60s), implemented generous ‘transition to retirement’ rules, and dumped the superannuation contributions surcharge on higher income earners. It is precisely these measures, along with Costello’s loosening of the assets test to qualify for the part Aged Pension and Commonwealth Health Card, that have contributed to the Budget mess that we face today that Labor is trying to undo (albeit not going nearly far enough).
Education Minister, Christopher Pyne, was equally out of line when he tweeted the following in response to Labor’s modest superannuation reforms:
Tell me Mr Pyne, with the average Australian worker earning just $59,000 a year (of which tax has to be paid), how is it appropriate to allow those aged over-60 and earning above $75,000 to pay zero tax on their superannuation earnings?
As noted by David Crowe today, a 70-year-old earning $100,000 a year from super would pay just $3,750 in tax on those earnings – hardly a big impost.
If anything, Labor’s proposed 15% superannuation earnings tax on incomes above $75,000 does not go anywhere near far enough, and everyone aged over 60 should pay 15% tax on their superannuation earnings, as was the case before Costello changed the rules in the 2006 Budget.
While you, Mr Pyne, might complain that so-called self funded retirees will be unhappy about Labor’s changes, rest assured it is news to the ears of working Australians, who are fed up being reamed by inequitable and unsustainable retirement policies brought in by your party in a bid to buy the grey vote.
