The Federal Government has promised there will be no more tax changes to superannuation following the wide sweeping packages of changes which came into effect on July 1 this year.
Federal Minister for Financial Services, Kelly O‘Dwyer gave the assurance in a speech to the Tax Institute conference in Sydney this morning.
“The coalition has done the job that we needed to do on the taxation of superannuation,” she said.
“The job has been finished and legislated.”
“There are no further plans.”
Changes which came into effect this July have cut the amount of annual contributions which can go into superannuation on a concessional basis from $35,000 a year to $25,000 a year. The amount which can be put into super on a post tax basis has been cut from $180,000 to $100,000 a year.
The changes also set a cap of $1.6 million on the amount of money which can go into a superannuation account which is tax free in retirement mode. The changes have also removed a lot of the attraction of transition to retirement plans which have been popular with people as they approach retirement age.
While the tougher measures are estimated to raise some $6 billion a year, the package also included a range of concessions worth some $3bn including making it easier for people with low superannuation balances to put several years “catch up” contributions into their super from next year.
The government also removed the “10 per cent rule” making it easier for people who work part time or in small businesses to get a tax deduction for their superannuation contributions.
While the government has claimed the superannuation changes only had a negative effect on a small percentage of people, the extent of the changes provoked some strong criticism from some people with larger super balances who had been actively putting substantial sums of money into super ahead of their retirement.
The Federal Government’s assurances today now pave the way for superannuation to become an issue in the next election.
The Turnbull Government will be arguing that a vote for the Labor Party and the Greens means higher taxes on superannuation.
“Our approach gives Australians certainty and the industry stability about the Coalition’s superannuation tax policy,” Ms O’Dwyer said.
“It stands in stark contrast to the Labor Party and the Greens who will slug superannuants significantly more in tax as they prepare for their retirement,” she said.
She said the Greens’ “so called ‘progressive super’ tax plan would “seek to extract up to $11 billion in extra taxes over four years.”
“And it seems that this is just the starting point,” she said.
“Labor have admitted that their superannuation policy will cost superannuants an additional $1.4bn.”
“The only certainty the Labor Party and the Greens are able to provide Australians saving for their retirement is that they will be hit with higher taxes,” she said.