Super changes to affect ‘1 in 10’
ONE-in-10 Australians retiring in 30 years’ time would be affected by Labor’s proposal to slash tax concessions on the biggest super balances, according to new modelling revealed in parliament.
Treasury has forecast 10 per cent of workers will retire in 2052 with enough superannuation to be implicated in the plan to double the concessional tax rate on super balances above $3m from 15 per cent to 30 per cent.
The Albanese government announced the policy last week, saying the changes would affect only 80,000 people, or 0.5 per cent of Australians when it is planned to come into effect after the next federal election in 2025.
But Finance Minister Katy Gallagher revealed more of Treasury’s modelling on Monday as she defended the reform during question time in the Senate.
“In 30 years, Treasury projects that roughly only the top 10 per cent of earners will retire with superannuation balances around $3m or more,” she said.
Australians with very large super balances would still be getting tax concessions under the policy, just smaller ones, with Labor arguing the reform is needed to improve the budget bottom line by saving $2bn a year.
“This is a modest change we are making in response to having to deal with the budget repair that is required from the economic vandalism of (the Coalition’s) decade in government,” Senator Gallagher said.
Nevertheless, the opposition seized on her revelation.
Senator Matt Canavan demanded to know why Labor didn’t tell Australians last week that 10 per cent of them would eventually be affected by the policy.
Over in the House of Representatives, Opposition Leader Peter Dutton fired off a question to Anthony Albanese about the same modelling about 100 minutes into question time.
In response, the Prime Minister said Australian workers were predicted to earn more and deal with different tax conditions in the future. “I make this bold prediction; that in 30 years’ time, some people will be earning more than they are today, and some people will be paying different income tax rates in 30 years than they are now,” Mr Albanese said sarcastically.
Treasurer Jim Chalmers told parliament the Treasury modelling was not the “stunning insight” the Opposition were making it out to be.
“Right now, in 2025, less than half of one per cent of people will be impacted … By the beginning of next decade, it’ll be around one per cent and … in 30 years, one in 10 people will be impacted by it,” he said in response to a question from opposition treasury spokesman Angus Taylor.
“This is the number that the shadow treasurer thinks is some kind of stunning insight.
“What we are proposing is a modest change, but it is a simple choice.”
The Coalition has savaged the government for breaking an election promise not to make changes to superannuation, but polling suggests Australians are supportive of the policy, particularly at a time when people are struggling with the cost of living caused by runaway inflation.
The latest Newspoll found 64 per cent of people approved of the plans to double the concessional tax rate for super balances over $3m.