The super rich could soon see an end to tax concessions on their superannuation incomes.
In a rare show of bipartisan support, Labor has offered to support the cash-strapped Liberals on a crackdown of the superannuation incomes of the super rich.
“The Labor Party believes the taxation treatment of superannuation is unfair and needs to be fixed,” said Shadow Treasurer Chris Bowen. “I pointed out that this could be a matter of some bipartisanship if the government chose to agree as part of this so-called national conversation.”
The changes will affect those who derive tax-free six-figure annual incomes from millions of dollars in superannuation accounts. Labor may support these new arrangements, as a compromise for the government to reconsider a compulsory 12 per cent employer-funded superannuation contribution scheme.
The Association of Superannuation Funds (ASFA) figures show that there are 475 people in Australia with more than $10 million in superannuation accounts, who earn $1.5 million in tax-free annual income. There are 10,000 more Australians with superannuation ledgers of $2 million or more, who also benefit from generous tax rulings on super. These current arrangements may mean that the government is foregoing around $35 billion in potential revenue each year.
However, the government is weary of making any changes to the superannuation rules, because of a pre-election promise that there would be no amendments to superannuation in its first term.
What do you think? Would you be affected by any changes the government makes to superannuation rules for the super rich? Do you feel that the super rich should be taxed at a higher rate?