Swan: Top tax concessions 'generous'

Written By Unknown on Kamis, 04 April 2013 | 00.04

Treasurer and Deputy PM Wayne Swan. Picture: Lyndon Mechielsen Source: News Limited

WAYNE Swan has added more fuel to speculation the government will raid superannuation contributions of the wealthy in the May budget saying tax concessions at the top end needed to be reined in.

Mr Swan today said the government had a "substantial savings task" but that any superannuation reform would not provide significant windfall in the budget.

He said Labor was approaching superannuation in the "spirit of reform that we saw during the period of the Hawke and Keating governments".

"The same principals that applied then, apply now," Mr Swan said.

"We will build the system up.

"We want to see all Australians having access to a decent retirement with a decent level of support from their superannuation. That's the spirit that we bring to this discussion."

The treasurer said tax concessions for the wealthy were excessive and needed to be made more sustainable.


"Everyone understands that the system has to be sustainable for the long term," Mr Swan said.

"The tax concessions at the very top are excessively generous and to make it sustainable over time the concessions need to be sustainable over time."

Mr Swan however would not be drawn on the specifics of the superannuation budget reform, including any retrospectivity.

"I am not going to engage in all of the speculation at the moment, most of it which is inaccurate," he said.

"We are going through a policy making process, we will continue to go through that in a methodical way and when we have completed that we will make our announcements."

With the government desperate to find savings to fund its Gonski education and disability insurance reforms, it is understood the super changes - to be unveiled in the May 14 budget - will hurt fewer than 100,000 people.

These are expected to see the tax paid on superannuation earnings increase, from 15 to 30 per cent for people earning over $300,000 - just 1 per cent of taxpayers, or 91,000 people.

In last year's Budget, the Government increased the tax to 30 per cent on super contributions paid to people earning $300,000-plus.

It is expected the proposed crackdown will reap around $2 billion in additional revenue over four years - enough to make a decent down payment on the big ticket education and disability reforms.

In 2009-10, the tax concessions for superannuation contributions and earnings were worth $21.7 billion. The top 1 per cent of income earners received 9 per cent of this value or $2 billion.

The latest tax expenditure statement, released in January showed that superannuation tax concessions became the biggest tax expenditure in 2012-13 - exceeding the cost of tax concessions for owner-occupied housing for the first time.

The tax concession on super earnings has increased in cost from $9.5 billion in 2009 10 to $17.1 billion in 2012-13, and it's expected to increase to $25.1 billion by 2015 16.
 


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