Super tax breaks let rich get richer

SUPERANNUATION t ax breaks are doubling the retirement incomes of the wealthiest Australians while penalising low-income earners.

The top 1 per cent of highincome couples will enjoy more than $5 million of super tax concessions in their lifetime, a new report by Industry Super Australia and research group Rice Warner says.

In contrast, couples in the lowest 10 per cent of income earners will lose $79,000 over their lifetime because their super gets taxed at a higher rate than their wages.

“Wealthy Australians

are getting Rolls Royce tax breaks, while the lowest income earners are clearly getting a raw deal,” Industry Super Australia CEO David Whiteley said.

“Our concern is that people on average incomes are not getting a fair deal out of the tax breaks in super.

“Because super is unlimited tax-free in retirement, the higher your income, the much greater the benefit.”

The report says that under the current rules, the annual retirement income for a couple in the top 1 per cent bracket will be more than $600,000 by 2055, twice as much as they would receive without today’s tax concessions. “Super tax breaks for top earners are outstripping assistance to middle and low income Australians, especially women, even when the age pension is included,” Mr Whiteley said.

The most generous super incentives — such as zero tax on income or withdrawals after age 60 — were introduced by the Howard government in 2006, but Rice Warner CEO, Michael Rice, said these came at a time of “whopping budget surpluses”.

He said a raft of financial reviews during the past decade suggested people knew the system needed changing, but governments feared losing votes if they took action.

Wealthy Australians are getting Rolls Royce tax breaks

DAVID WHITELEY