Momentum builds on targeted tax concessions

Australia's largest industry fund, AustralianSuper has joined calls for the tax concessionality of superannuation to be changed to preclude it being utilised as an estate planning vehicle by wealthy Australians.

In a submission responding to the Tax White Paper discussion process, AustralianSuper said it was important that tax concessionality delivered in respect of retirement outcomes, but no further.

"AustralianSuper agrees that the taxation system as it applies to superannuation could be improved in terms of its fairness and complexity," it said.

Related News:

"There are opportunities to consider fairness across a range of superannuation recipients, from low income earners who pay higher tax on their superannuation than they pay on their wages, to the fairness of having an unlimited tax exempt environment for superannuation retirement income for all recipients."

The submission said encouragement to save for retirement also needed to be balanced against the taxpayer burden to provide concessional taxation treatment for those already able to provide for their own retirement and that the taxpayer burden to provide concessions to the superannuation system should have some limits applied to it.

"There is a question about the long term taxpayer burden of having an unlimited tax exempt environment for superannuation retirement income for all recipients – the cost of this subsidy has been exacerbated by the commencement of the retirement of baby boomers," the submission said.

"A sustainable system is one where superannuation fund members can have some certainty about superannuation rules so they can plan for their retirement with confidence."

It also argued that a fair superannuation system was one where taxation concessions provided by all taxpayers were not used to advance estate planning by some.

"Consistent with the objectives of the retirement incomes system, concessions to the superannuation system should reasonably be limited so they apply to provide retirement benefits only," the submission said.

"In particular, it is desirable for there to be a link between limits on tax exempt retirement income with tax free thresholds outside of superannuation."




Recommended for you

Comments

Add new comment