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| Labor proposes to further tighten superannuation tax concessions Labor proposes to further tighten superannuation tax concessions | |
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| Labor will propose changes to the government’s superannuation package that it says would raise $1.4bn over four years and $18.9bn over 10 years. | Labor will propose changes to the government’s superannuation package that it says would raise $1.4bn over four years and $18.9bn over 10 years. |
| The changes are an attempt to further tighten generous tax concessions for superannuation that disproportionately benefit high-income earners. It is also designed to put pressure on the Coalition, which modified its super policy to contain a breakout of dissent within its own ranks. | The changes are an attempt to further tighten generous tax concessions for superannuation that disproportionately benefit high-income earners. It is also designed to put pressure on the Coalition, which modified its super policy to contain a breakout of dissent within its own ranks. |
| On 15 September the government ditched its election policy to impose a $500,000 lifetime cap on non-concessional contributions in favour of a $100,000 annual cap. | On 15 September the government ditched its election policy to impose a $500,000 lifetime cap on non-concessional contributions in favour of a $100,000 annual cap. |
| On Tuesday the opposition leader, Bill Shorten, will propose lowering the annual cap on non-concessional contributions to $75,000, lowering the high-income superannuation contribution threshold to $200,000 and opposing two other “loopholes”. | On Tuesday the opposition leader, Bill Shorten, will propose lowering the annual cap on non-concessional contributions to $75,000, lowering the high-income superannuation contribution threshold to $200,000 and opposing two other “loopholes”. |
| The first “loophole” is the ability to make catch-up concessional contributions, which would mean that if individuals do not reach their $100,000 cap in any given year they can access their “unused” cap space on a rolling five-year basis. | The first “loophole” is the ability to make catch-up concessional contributions, which would mean that if individuals do not reach their $100,000 cap in any given year they can access their “unused” cap space on a rolling five-year basis. |
| The second is a change the government proposed in the 2016 budget to allow all individuals up to age 75 to claim an income tax deduction for personal superannuation contributions. In September the government moved the start date of the deduction to 1 July 2018. | The second is a change the government proposed in the 2016 budget to allow all individuals up to age 75 to claim an income tax deduction for personal superannuation contributions. In September the government moved the start date of the deduction to 1 July 2018. |
| Labor said its package will raise $1.4bn over four years, and $18.9bn over the medium term of 10 years. If adopted by the government, the total budget improvement of the superannuation package would be $4.5bn over four years and $32.6bn over 10. | Labor said its package will raise $1.4bn over four years, and $18.9bn over the medium term of 10 years. If adopted by the government, the total budget improvement of the superannuation package would be $4.5bn over four years and $32.6bn over 10. |
| Shorten said the government’s super package did not go far enough to return “fairness to the superannuation [system]” or to deliver substantial budget repair. | Shorten said the government’s super package did not go far enough to return “fairness to the superannuation [system]” or to deliver substantial budget repair. |
| “If Malcolm Turnbull is truly interested in strengthening super and repairing the budget, he will sign up to my responsible proposals,” he said. | “If Malcolm Turnbull is truly interested in strengthening super and repairing the budget, he will sign up to my responsible proposals,” he said. |
| “It’s ludicrous that the prime minister is proposing new tax loopholes that benefit high-income earners instead of cracking down on existing ones.” | “It’s ludicrous that the prime minister is proposing new tax loopholes that benefit high-income earners instead of cracking down on existing ones.” |
| According to the parliamentary budget office, the government’s $100,000 annual cap will capture just 0.7% of people contributing to superannuation. They have an average wage of $136,000 a year and a super balance of $1,050,000. | According to the parliamentary budget office, the government’s $100,000 annual cap will capture just 0.7% of people contributing to superannuation. They have an average wage of $136,000 a year and a super balance of $1,050,000. |
| The vast majority of taxpayers make no non-concessional contributions (86.6%) or less than $10,000 worth (11.6%). | The vast majority of taxpayers make no non-concessional contributions (86.6%) or less than $10,000 worth (11.6%). |
| Under the government’s proposal people earning $250,000 and over pay 30% tax on their superannuation contributions, rather than 15%. Labor proposes lowering that threshold to $200,000, which would affect 4% of taxpayers. | Under the government’s proposal people earning $250,000 and over pay 30% tax on their superannuation contributions, rather than 15%. Labor proposes lowering that threshold to $200,000, which would affect 4% of taxpayers. |
| When the treasurer, Scott Morrison, unveiled the government’s new policy in September, he said Labor had “no excuse” not to support it. “It removes every impediment that Labor mentioned.” | When the treasurer, Scott Morrison, unveiled the government’s new policy in September, he said Labor had “no excuse” not to support it. “It removes every impediment that Labor mentioned.” |
| In particular Labor opposed the retrospectivity of the $500,000 lifetime cap which the government subsequently ditched. | In particular Labor opposed the retrospectivity of the $500,000 lifetime cap which the government subsequently ditched. |
| Shorten said the government had “stuffed up super” and made “shambolic” changes after the election amid backbench revolt. | Shorten said the government had “stuffed up super” and made “shambolic” changes after the election amid backbench revolt. |