Yesterday, Prime Minister Turnbull hit back at wealthy rent-seekers opposing the Coalition’s superannuation caps, telling them to “get real” because they would still be paying a lower rate of tax than a 15-year-old kid stacking shelves at Woolies:
“It is true that some people, around 4 per cent, on high incomes and with high superannuation balances will have to pay some more tax on their superannuation account – in the sense they will pay the 15 per cent tax whereas previously they were paying nothing”…
“So if you have someone who has $10 million in their superannuation account in retirement, currently they are not paying any tax at all on the earnings from that. No tax at all. Under our changes, they will have no tax on the earnings of $1.6 million and on the balance they will pay 15 per cent, right?
“That is less tax than a kid pays on his marginal income stacking shelves at Woollies”…
“Let’s get real about this.”
Treasurer Scott Morrison went further, admitting that Peter Costello’s ridiculously generous reforms to superannuation were never sustainable, while talking-up the positive impact of the Coalition’s policy on lower income earners:
[We are limiting] “generous concessions that have been in place for quite a period of time and are unsustainable into the future”.
“What they are doing is making sure that we are able to invest in making positive superannuation available for people on lower incomes in particular”..
“More than 3 million people will benefit from the superannuation changes we have announced in the budget.”
Indeed, the latest ASFA research shows that the Coalition’s super policy could adversely affect 1.26 million wealthy people, but improve the lot of 4.3 million lower income earners, as well as improve the Budget by $3 billion. It’s a win-win.
But instead of taking the high ground and offering bipartisan support to the Coalition’s changes, and in-turn sucking the oxygen from the wealthy rent-seekers, Labor has instead sensed a political opportunity and stepped-up its hypocritical attack on the Coalition’s policy, launching an attack add claiming the Government is raiding Australia’s nest eggs.
Here is what the ad says:
“Your super needs to go further than it ever has before. But now Malcolm Turnbull wants to dip into the savings you made years ago, changing the rules, taxing savings that took years to build-up. You made plans thinking your nest egg would always be safe. Now Mr Turnbull wants to raid that nest egg. Under Mr Turnbull, your super’s not safe”.
You can watch it for yourself here.
Labor’s position is the height of hypocrisy, since it too has raised taxes on high-end super earnings.
Under Labor’s proposed superannuation reforms, annual earnings in retirement of more than $75,000 would be taxed at 15% versus 0% tax currently. Assuming a historical 5% return, this equates to a super balance of $1.5 million – even less than the Coalition’s $1.6 million cap!
Again, superannuation reform is one of the few areas where Australia could have had bipartisan support for change. But instead, Labor has chosen to score a cheap political point and given the rent-seekers a clear line of attack, thus making actual reform more difficult.
Such is the adversarial nature of modern politics, whereby scoring a quick political point always trumps the national interest.
Shame on you, Labor. Australia deserves better.
