Treasurer Scott Morrison has confirmed the federal government is “close to a landing point” on changes to superannuation, which he promised to announce at or before the 2016 budget.
He hinted that the tweaks would be restricted to super tax incentives, but offered few details.
“There is a strong case for examining the size and structure of the tax concessions and the treatment,” Mr Morrison told a superannuation conference in Adelaide on Thursday.
“It’s clear that we are going to have to make some hard decisions when it comes to how we’re going to address the targeting of these tax concessions going forward.
“We have made it clear that we will be looking at superannuation, and we will hope to make either a statement before the budget on that or at the budget.”
Some experts have criticised the current system for allowing high income earners to minimise tax by investing large sums of money into super funds.
Former Labor minister Graham Richardson praised the possibility of changes to the concession on Friday morning, telling Sky News the current concessions were being used by rich Australians as a “rort” for “washing tax out of current income”.
Retirees, Labor and the super industry are concerned that the government will go further, finding budget savings by freezing the super guarantee at the current rate of 9.5 per cent, forestalling a planned increase.
The super guarantee is the percentage of an employee’s wage set aside by their employer for investment in a super fund or self-managed fund.
The Treasurer reportedly did not discuss the super guarantee during Thursday’s speech.
It was a report in the West Australian earlier in February that sparked fears of a guarantee freeze. The newspaper reported that the idea had been costed by Treasury at the request of the government.
The opposition responded to the Treasurer’s speech by accusing the government of plotting an attack on retirement incomes of 9.5 million Australians.
“What Scott Morrison is proposing is to attack the retirement incomes of 9.5 million Australians, those Australians who are working hard and saving for their retirement,” Labor’s superannuation spokesman Dr Jim Chalmers told ABC radio on Friday.
Labor’s priority is to change arrangements for those earning more than $75,000 a year on their super balances in retirement, Dr Chalmers said.
Greens leader Richard Di Natale said unfair tax breaks in super were going to people on high incomes at the expense of people on low incomes.
“I hope that they recognise that if we are to start investing in things like healthcare and education that we need to start tackling some of these unfair tax breaks and make sure tax reform starts at the top rather than at the bottom,” he told ABC TV.