Finance Your Super Labor reveals plan for superannuation changes

Labor reveals plan for superannuation changes

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Labor will today propose superannuation tax changes it says would raise more than $14 billion from high-income and wealthy Australians over 10 years.

The move would see retirees lose tax-free status on annual superannuation earnings above $75,000, and more people pay 30 per cent tax on contributions.

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Opposition Leader Bill Shorten said the measures would ensure the super system was sustainable.

“These changes are all about putting fairness back into the system,” he said.

“These changes are good for the future integrity of Australia’s pensions and superannuation system.

“They are fair and they’re good for the budget.”

Change one: greater tax on contributions for high income earners

During its last term in office, Labor introduced a high-income superannuation charge for people earning more than $300,000 annually, taxing these people’s contributions at 30 per cent (everyone else pays 15 per cent on contributions).

Labor’s proposal would see a 30 per cent contribution tax rate apply to people earning above $250,000 a year.

The ALP estimates 110,000 people would be affected by the new arrangements.

The party estimates it would raise $5.1 billion in the decade to 2026-27.

Change two: taxing retirement earnings above $75,000

Earnings from superannuation accounts for retirees in the pension phase are currently tax-free.

The Opposition’s proposal would see earnings $75,001 and above taxed at 15 per cent.

The party estimates it would affect about 60,000 people with superannuation balances above $1.5 million and raise $9.2 billion in the 10 years to 2026-27.

Industry to be consulted over proposed changes

The Opposition is also vowing the moves would be their only changes to the tax treatment of superannuation if elected.

Mr Shorten and the shadow treasurer Chris Bowen will detail the proposals today, during a speech at the National Press Club.

Labor said it would provide the Australian Tax Office with extra resources to execute the policy.

The party also said it would consult with industry before the next election around the implementation of the package.


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