Monday, April 08, 2013

Labor's attack. It's the Coalition that's gunning for your super

Labor has gone on the offensive over superannuation accusing Tony Abbott of a tax slug that will rip $4 billion from national savings.

A Facebook campaign started Sunday says under Labor a mere 16,000 people “with millions” will pay a fair amount of tax. By contrast under the Coalition 3.6 million “of the lowest paid” will pay more.

Opposition leader Tony Abbott confirmed on Sunday that the Coalition would abolish Labor’s Low Income Super Contribution which cuts tax to zero on 3.6 million super accounts.

“We have said from the very beginning programs funded by the mining tax wouldn't go ahead because we're going to scrap the mining tax,” he said.

If re-elected Labor would have had to abolish the program itself. “The mining tax which funds it hasn't raised any revenues. No-one should think this programme is safe,” he said.

Acting prime minister Wayne Swan released figures showing 910,000 of the low earners the Coalition would hit lived in Victoria. Two thirds were women.

“Tony Abbott has spent the last two weeks fuelling rumours about the government’s superannuation reforms to keep his $4 billion raid as secret as he can,” Mr Swan said.

“He says we’re raiding super when we make modest changes that will affect 16,000 of the most wealthy Australians - by his own test, what is he doing if he goes after the super savings of 3.6 million, as he said he will do?”

“His raid hits 225 times as many people our reforms announced on Friday.”

The Coalition superannuation policy is not yet finalised. Spokesman Mathias Cormann held out hope of another measure to assist low income earners in place of the Labor program...

“We have long been on the record as wanting to re-visit both concessional contribution caps and super co-contribution benefits for low income earners,” he said. This would happen “as soon as the budget is in a strong enough position to afford it”.

“Over the past five years Labor has increased taxes on super by more than $8 billion - predominantly targeting low and middle income earners. If it re-elected in September it will do the same again.”

The former head of the government’s super review Jeremy Cooper, now head of retirement incomes at Challenger, backed Labor’s decision to boost from zero to 15 per cent the tax rate on earnings supporting income streams of more than $100,000.

“On Treasury’s numbers it will only affect 16,000 Australians. It is hard to have too much sympathy for such an elite group,” he said.

Mercer senior partner David Knox said while earnings supporting high payouts would be more highly taxed but that he did not think “that was unreasonable.”

Asked why Labor didn’t go further and outlaw untaxed lump sum withdrawals superannuation minister Bill Shorten said the government had not wanted “to startle the horses.”

Asked twice on Sky News whether she had wanted to go further, finance minister Penny Wong deflected the question saying she was “certainly never going to be one of the people that discuss what might or might not have been said in cabinet”.

In The Age

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