Prime Minister Anthony Albanese insists there will be no major changes to superannuation as any tax break adjustments would only hit a small number of accounts with millions stashed away.
Albanese argued during his speech to the National Press Club on Wednesday that Labor would not break an election promise to leave super alone, as shadow treasurer Angus Taylor said the government risked “leaving Australian retirees in the cold” by considering changing tax concessions.
Prime Minister Anthony Albanese said Labor wanted to legislate a definition for super.Credit:Alex Ellinghausen
“The entire super system is undermined when parties break election promises, particularly when it comes to the tax arrangements on superannuation,” Taylor said in a speech to the Association of Superannuation Funds of Australia on Wednesday evening.
“It was never envisioned that super be used to plug revenue gaps or extend fiscal policy.”
On Monday, Treasurer Jim Chalmers unveiled the government’s suggested wording for a definition of super that would restrict its use to retirement income, and said the cost of tax concessions was in his sights before the May budget.
Key Senate crossbenchers are open to backing a shake-up of super tax breaks, but the opposition seized on the mooted tax overhaul as a broken promise.
Asked in May last year if he would rule out increases to super taxes and changes to caps, Albanese said: “We have no intention of making any super changes.”
On Wednesday, Albanese said Labor had committed to not making major changes to superannuation ahead of last year’s election and that remained the government’s intention. He also noted that tax breaks for super were projected to cost the budget more than the aged pension in coming years.
“What we’re talking about here is there’s nothing that impacts the sustainability of the system from punters out there who have got $150,000 in their accounts,” he said at the National Press Club on Wednesday.
“That’s not an issue at all, which is the average. We said during the election campaign that we did not intend to make big changes to superannuation. And we don’t.”
Labor promised in April last year before the election it would make some changes to super, including enshrining a definition of superannuation in law, and that it would make alterations to the way funds are managed and regulated.
The Australian Institute of Superannuation Trustees has called for a limit of $5 million in super accounts, saying the concessions were inequitable. The Grattan Institute has suggested a tax threshold of $2 million on super earnings, allowing people to stash as much money as they liked in their super but imposing a higher rate of tax on funds over that amount.
Increasing that tax rate would bring in an additional $1.5 billion a year, the Institute’s economic policy program director Brendan Coates said.
Shadow treasurer Angus Taylor said the government risked “leaving Australian retirees in the cold”.Credit:Getty Images
“There is $300 billion in super, in accounts that have more than $2 million,” Coates said.
”That’s nearly as much money in super as what everyone with a balance under $100,000 has, which is two-thirds of Australians.”
Earlier on Wednesday Assistant Treasurer Stephen Jones said the government did not have a final view on changes to those concessions.
“I’m not going to say we’re not thinking about it, clearly we are,” he told ABC News Breakfast.
“If we all agree that the purpose of superannuation is to provide income in retirement, it beggars belief you could have $100 million in a superannuation account attracting very generous tax concessions.”
Australian Taxation Office figures from 2019 showed the top 100 self-managed super fund accounts all had balances of more than $50 million, and were worth a combined $9.64 billion. At the time, more than 27 accounts had more than $100 million.
Jones said the country needed to have a debate about the tax breaks and the government has to look at it.
“What we’re thinking about is what is a reasonable amount of money, which is consistent with that objective of having tax-assisted savings for retirement income,” he said.
“Let me be very clear. This is not about saying people can’t save more than $5 million, $10 million, $100 million for their retirement.
“We’re saying what is a reasonable contribution that the Australian taxpayer, through the budget, should be making to assisting people save for retirement incomes?”
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