Generous superannuation concessions provided to high-income earners was thrust back into the spot light last night in a report from ABC’s The Business (video above).
The report discloses that very high income individuals, such as the CPA’s Alex Malley, CBA boss Ian Narev, Telstra boss Andy Penn, and Wesfarmers boss Richard Goyder, continue to received very generous superannuation tax breaks, which is adding to the $31 billion cost to the Budget of superannuation tax breaks annually.
The report features several experts, including Alex Dunnin, Director of Research at Rainmaker, who argues that “we can’t keep giving people that have money more money” if we want to pay “off the national debt, pay for hospitals, pay for schools, and pay for Aged pensions”. Dunning notes that Australia spends a lot of its super tax breaks on people that already have a lot of money, and that our system is skewed towards people that have the money.
The Grattan Institute’s Brendan Coates is also featured, who argues that super tax breaks should cut out at the point where you are no longer likely to be eligible for the Aged Pension, which is an income of $51,000 for a single person and $77,000 for a couple. Grattan wants the maximum pre-tax super contribution to be slashed to $11,000 a year, which equates to a maximum salary of $115,000.
In any event, this discussion is largely academic given the Turnbull Government only recently pushed through modest reforms (caps) to superannuation after much deliberation, debate and opposition from industry rent-seekers.
Hence, there doesn’t seem to be much chance that this issue will addressed again any time soon by our politicians, which means that fundamental reform of the superannuation system will be pushed into the never-never.
